Billson hands ACCC powers to fine franchises that breach industry codes

The federal government has pushed ahead with its plans to give the competition watchdog powers to fine franchisees and franchisors that breach the soon-to-be-updated Franchising Code of Conduct.

Small Business Minister Bruce Billson introduced the Competition and Consumer Amendment (Industry Code Penalties) Bill 2014 in the House of Representatives yesterday, seeking to allow the ACCC to issue infringement notices of up to $8500 to businesses that breach industry codes, or seek penalties of up to $51,000 from courts.

Billson told SmartCompany this morning he expects the bill to pass parliament without any opposition.

“It’s a reform I’ve certainly been calling for for years and we’ve received widespread support from the community and both sides of parliament,” says Billson.

Peter Strong, executive director of the Council of Small Business of Australia, told SmartCompany the introduction of the legislation is a “great move”.

“You can have all the rules under the sun, but they are not good if you don’t have sanctions,” Strong says.

“It sends a message to those who are doing the wrong thing that they will be punished in the only way they understand – that’s money.”

Billson says the enabling legislation is one part of a two-step process. The bill will give the ACCC the power to impose penalties for any business breaching a code of conduct, and the government will specifically apply the clauses as part of its revamp of the Franchising Code of Conduct.

The Coalition announced the changes in early April, along with the introduction of a general duty on franchisors and franchisees to act in good faith during their dealings with each other.

The changes followed the recommendations set out by the 2013 Wein Review, which are set to be codified in the update to the code, which has regulated the sector since 1998.

Billson says the government is still on track to have the new code operational from January 1, 2015, and says he hopes to introduce the code around October.

“We have done extensive consultations and are working closely with all stakeholders involved in the franchise economy,” says Billson, who says he has been pleased with the willingness of the community to get involved with the process.

 “We’re very happy with the code and we’ll be refining and polishing it with further consultations,” he says.

Billson says he is currently working on ensuring the “most effective transition arrangements” will be in place for franchisees and franchisors moving to the new code so the process will be “simple and straightforward”.