2 November 2011
On 20 October 2011, the South Australian parliament passed the Small Business Commissioner Bill. Along with most other industry associations, ICA supported the Bill. Surprisingly, the Franchise Council of Australia was strongly opposed and lobbied against the Bill.
When established, the SBC will be similar to the SBC operating in Victoria and now being set up in WA and NSW.
The key features for self-employed small business people are
Cheap, dispute mediation:
When you have a commercial dispute that can’t be resolved, you’ll be able to go to the SBC and have them assist. The mediation service, modelled along Victorian lines, should prove cheap and quick. Note that the SBC doesn’t have the power to force decisions like a court. The SBC is a mediation step before court action.
Dispute with a big business:
The Commissioner has the power to make representation on your behalf to the CEO of large businesses. It’s often the case that you as a small business person are stuck dealing with a manager in a big business and you can’t get resolution. The Small Business Commissioner, with your approval, can ring the CEO of the business with the problem. This often fixes disputes quickly.
Power to require information:
If you’re in dispute and the other side doesn’t want to cooperate to fix the issue, the SBC has strong powers to require the other party to produce information. This does not guarantee a successful mediation, but it does let the other side know that they must take the mediation seriously.
The SBC will have powers over industry codes of practice. This will develop over time. The SA government will be able to introduce industry codes on the recommendation of the SBC and after consultation with industry representatives.
Key clauses in the Bill
(1) The functions of the Commissioner are—
(a) to receive and investigate complaints by or on behalf of small businesses regarding their commercial dealings with other businesses and to facilitate resolution of such complaints through measures considered appropriate by the Commissioner such as mediation or making representations on behalf of small businesses; and
(b) to assist small businesses on request in their dealings with State and local government bodies; and
(c) to disseminate information to small businesses to assist them in making decisions relevant to their commercial dealings with other businesses and their dealings with State and local government bodies; and
(d) to administer Part 3A (Industry codes) of the Fair Trading Act 1987 and the Australian Consumer Law (SA) to the extent that responsibility for that administration is assigned to the Commissioner under the Fair Trading Act 1987
(e) to monitor, investigate and advise the Minister about—
(i) non-compliance with industry codes that may adversely affect small businesses; and
(ii) market practices that may adversely affect small businesses; and
(f) to report to the Minister on matters affecting small businesses at the request of the Minister; and
(g) to report to the Minister on any aspect of the Commissioner’s functions at the request of the Minister or on the Commissioner’s own initiative; and
(h) to take any other action considered appropriate by the Commissioner for the purpose of facilitating and encouraging the fair treatment of small businesses in their commercial dealings with other businesses or assisting small businesses in their dealings with State or local government bodies; and
(i) any other functions conferred on the Commissioner by or under this or any other Act.
(2) The Commissioner is to perform the functions with a view to the development and maintenance in South Australia of relationships between small businesses and other businesses, and small businesses and State and local government bodies, that are based on dealings conducted fairly and in good faith.
12—Power to require information
(1) The Commissioner may, by written notice served personally or by post, require a person to give the Commissioner, within a reasonable time specified in the notice, information in the person’s possession that the Commissioner requires for the performance of the Commissioner’s functions under this Act.
(2) A person required to give information under this section must provide the information within the time stated in the notice.
Maximum penalty: $20 000.
(3) A person cannot be compelled to give information under this section if the information might tend to incriminate the person of an offence or is privileged on the ground of legal professional privilege.
[Note: The SBC has powers under the Fair Trading Act and therefore over industry codes]
28E—Contravention of industry codes
A person must not, in trade or commerce, contravene a prescribed industry code or a prescribed provision of an industry code.
28F—Regulations relating to industry codes
(1) The regulations may—
(a) prescribe an industry code, or provisions of an industry code, for the purposes of this Part and declare (subject to section 4B(3)) whether the Commissioner for Consumer Affairs or the Small Business Commissioner is to be responsible for the administration of this Part in relation to the code or provisions; and
(b) declare that a contravention of section 28E of a particular class (constituted of a contravention of the whole or any specified part of a prescribed industry code or prescribed provisions of an industry code) is to be subject to a civil penalty under Part 7 Division 3A; and
(c) fix expiation fees (not exceeding $6 000 in the case of a body corporate and $1 200 in the case of a natural person) for alleged civil penalty contraventions within the meaning of Part 7 Division 3A; and
(d) declare that a specified activity is to be taken to be an industry for the purposes of this Part and that persons of a specified class are to be taken to be participants in the industry.
(2) A proposal for regulations prescribing an industry code or provisions of an industry code under this section may be initiated by—
(a) if the Commissioner for Consumer Affairs is to be responsible for the administration of this Part in relation to the code or provisions—the Minister responsible for the administration of this Act; and
(b) if the Small Business Commissioner is to be responsible for the administration of this Part in relation to the code or provisions—the Minister responsible for the administration of the Small Business Commissioner Act 2011
(2a) If a Minister initiates a proposal for regulations prescribing an industry code or provisions of an industry code under this section, the Minister must, before the regulations are made, consult with each organization that the Minister considers to be representative of an industry likely to be affected by the code or provisions.