Let’s be honest. Trading and consumer law can be complex. If someone asked you to explain Australia’s fair trading laws, you might be a bit vague on the details. But as a small or medium business owner, it’s crucial to understand how they impact you and your customers. In particular, you should know what fair trading laws and specific clauses are relevant to your business, as well as how they can protect you and your customers from unfair trading practices. Tempted to put this in the too hard basket? Don’t! Whether you’re a sole trader or a company with 200 employees; if you buy or sell goods or services, Australia’s competition and consumer laws apply to you.If you don’t comply with your obligations, you’re breaking the law and penalties will apply.Yikes. But don’t stress, grab a cup of coffee and settle in; here are the key things you need to know now.
What are fair trading laws?
When you go into business to sell your services or products, fair trading laws are the regulations you need to adhere to when you engage with suppliers and customers. The laws protect you and also guarantee your customers’ rights as consumers of your product. One of the foundations behind this legislation is that it’s against the law to limit or prevent competition with other businesses. So, you need to understand how to navigate this when you start your own enterprise. Here are the key pieces of legislation to be aware of:
- The Competition and Consumer Act 2010 (CCA) governs how businesses across Australia deal with their customers and competitors. It makes sure that consumers’ rights are protected and that all businesses operate and compete on a level field.
- The Australian Consumer Law (ACL) is part of the CCA and more specifically protects consumers rights.
The Competition and Consumer Act 2010 explained
Fair trading in Australia is covered in the Competition and Consumer Act 2010 (CCA). It covers the relationships between Australian businesses, customers, competitors and suppliers. Administered and enforced by the Australian Competition and Consumer Commission (ACCC), it encourages fair trading practices and competition and a range of protections for consumers. The elements included are:
- product safety
- industry codes
- unfair market practices
- price monitoring
- product labelling
- industry regulation – airports, electricity, gas, telecommunications
- mergers and acquisitions
The ACCC Small Business and the Competition and Consumer Act lays out your key rights and obligations. Here’s a summary of the key points from the guide*:
- You can try to have unfair contract terms declared void
- You can collectively bargain with other small businesses against a larger firm
- Prices and discounts on your goods and services can be chosen by you
- You, and other businesses working with you, mustn’t engage in unconscionable conduct
- In some circumstances, it may be illegal for another business to refuse to supply to you
- You mustn’t enter into contracts, arrangements or understandings with competitors about things such as prices, supplied goods or services, where goods or services will be sold or who they’ll be sold to
- You must identify and remove unsafe products and product-related services
- Automatic guarantees apply to consumers when they buy goods or services
- Manufacturers will reimburse you the costs if you fix a manufacturing defect for a customer
- You don’t have to provide a refund if a consumer has changed their mind
- Your advertising material and any statements must be clear, accurate and truthful
- You must provide a receipt if a consumer requests one or the transaction is over $75
For more detail, you can read the full guide here.
The Australian Consumer Law explained
The Australian Consumer Law (ACL) is the primary law protecting consumers in all sectors and jurisdictions across all states and territories in Australia. It forms part of the Competition and Consumer Act (2010). The ACL governs the consumer’s behaviour, prevents unfair trading practices and ensures consumers’ rights are upheld when dealing with other businesses. This law not only regulates consumers’ behaviour but also provides you with protection when dealing with other businesses. It includes consumer guarantees for goods and services purchased and regulates product safety. As a business owner, it is important to know not only your own rights, but the rights of your customers. The ACCC, along with State and Territory consumer protection agencies administer the ACL and CCA. In any matters related to financial services, the ASIC will also be involved.
Are fair trading laws the same across Australia?
The Competition and Consumer Act is a national law, however fair trading laws do differ depending on which state or territory you’re in. There are also different protections for consumers state by state. Make sure you know what applies to your business in your state so you can meet your obligations.
- If you’re in the ACT, you’re covered by the ACT Fair Trading Act 1992.
- NSW businesses and consumers are covered by the NSW Fair Trading Act 1987.
- Businesses and consumers in Queensland are covered by the QLD Fair Trading Act 1989.
- Victoria is covered by the Australian Consumer Law and Fair Trading Act 2012.
- SA, you have the SA Fair Trading Act 1987.
- For the NT, it’s the NT Consumer Affairs and Fair Trading Act 1990.
- Tassie businesses should read up on the Australian Consumer Law (Tasmania) Act 2010.
- The WA Fair Trading Act 2010 covers businesses in WA.
Are there any exemptions?
There’s always an exception to any rule. Some states and territories allow practices authorised explicitly by other Fair Trading Acts that would not be permitted under the CCA. These include the Australian Postal Corporation Act 1989 and the Banking Act 1959. You can find more information on fair trading exemptions here.
How can you make sure your business is compliant?
A workplace compliance program doesn’t have to be complicated, but it’s the simplest way to make sure your business and employees are doing the right thing under Fair Trading laws. It would usually include a set of policies and procedures and training programs to educate and guide your staff. Documented and accessible policies and procedures will help everyone know what’s expected of them and reduce the risk of breaking the law. It shows that your business is committed to your obligations and creates a compliant culture. It will also boost your reputation and demonstrate to your customers that your organisation is serving their best interests.
Fair Trading laws like the Competition and Consumer Act 2010 and Australian Consumer Law, are in place to not only promote healthy competition but protect both businesses and consumers from unfair trading practices. The idea is that every company, large or small, operates under the same governance; one even playing field where everyone gets a fair go. That’s the nice bit. On the flip side, if you don’t play by the rules, you’ll face penalties. So, while it might feel a little overwhelming to dive into the detail, it’s an important part of owning a business. Now that you have a clearer idea about fair trading laws in Australia (including why they’re important and how they apply to your business), don’t forget to follow up on additional laws that apply to your state. Finally, close the loop by sharing your new found knowledge with your staff. A workplace compliance program, including policies and education, can help you do this. Ready to play? *Small business and the competition and consumer act.
Is your business compliant? Download our HR compliance guide here. 👇