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Competition boss puts target on unions’ backs

Rod Sims, ACCC chairman. Photo: ACCC

Unions shouldn’t be able to decide who operates in a market with illegal price-fixing tactics, Australian Competition & Consumer Commission chairman Rod Sims has said.

The ACCC has stepped-up its focus on industrial relations issues in the wake of a number of alleged breaches of competition laws, and the ongoing Royal Commission inquiry into trade unions, Sims told a Law Council of Australia meeting on Saturday, August 15.

Sims conceded the ACCC may not have paid close enough attention to industrial relations issues in the past, and vowed to step up in that area.

“The role of unions [is not] to regulate markets by fixing prices, deciding who can and can’t operate in a market, or determining how bids for work will be allocated,” he said, “just as it is not any company’s role to do this.”

Exemptions to the Competition and Consumer Act mean the ACCC’s powers are somewhat limited when it comes to industrial relations issues.

The Act doesn’t apply to services of employees performed under a contract of service, and the ACCC does not have jurisdiction to deal with arrangements that relate to employment conditions. The Act also dictates the ACCC can’t rule on enterprise agreements  already approved by the Fair Work Commission.

But Sims is confident the ACCC still has a major role to play to ensure the fairness of the industrial relations landscape.

“The ACCC may currently have more union-related major investigations than ever before,” he said.

“We currently have two further in-depth secondary boycott investigations underway, one at an advanced stage.”

Sims referenced the ACCC alleging 12 cases of breaches of secondary boycott provisions under the Act, relating to the dispute between the CFMEU and Grocon. The union in that case allegedly attempted to induce Boral to stop supplying concrete to Grocon.

The ongoing Royal Commission hearings in Canberra have also led the ACCC to investigate two instances of potential cartel behaviour in the ACT construction sector, he added.

“It is possible that in the past the ACCC has not looked sufficiently into such additional restrictive behaviour that could amount to a contract, agreement or understanding that has the purpose or effect of substantially lessening competition,” Sims conceded, suggesting that may have occurred due to the ACCC believing it was more limited by the exemptions to Competition and Consumer Act than was actually the case.

“The alleged behaviour in Canberra may provide an avenue to do so in the context of investigating the alleged cartel behaviour.

“This type of alleged conduct can disrupt competitive markets, increase costs and impede productivity. In these circumstances we need to ensure that our competition law applies to such restrictive behaviour as it does to every other sector of the economy.”

Sims said the ACCC will make a submission to the Royal Commission “outlining some difficulties with current laws”.

“The secondary boycott provisions are complex and open to differing interpretations,” he argued.

“In addition, the boycott provisions are the only anti-competitive conduct provisions in the CCA which require both a purpose and effect test to be proven, and this sets a high threshold.

“The ACCC is also concerned that there are not appropriate mechanisms which will protect whistle-blowers or other parties who provide information to assist with ACCC investigations,” he added.

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