Supplementary Remarks – Senator Andrew Murray
Secondary boycotts a contentious matter
Provisions relating to secondary
boycotts have been part of Australian law under both Labor and Coalition
Governments for over 25 years. International jurisdictions (for example, the United
States) have very similar provisions in their laws.
Primary boycotts (that is, normal
industrial action as part of a dispute) are exempted from the law, unless it
affects the movement of goods in and out of Australia.
For the union movement and some
members of the community, the secondary boycott provisions of the Trade
Practices Act 1974 (TPA) have long been contentious. 3.6 of the report
summarises those opposing arguments well.
In the face of this opposition,
the Australian Democrats have remained supporters of section 45D that prohibits
two or more persons from acting in concert to hinder or prevent the supply or
acquisition of goods or services by a person or company that is the target of
the boycott; and section 45E that prohibits a person from making an agreement
with a trade union for the purpose of preventing or hindering the supply or acquisition
of goods and services between that person and the target of the boycott.
If an organisation does breach
these provisions, innocent third parties can obtain either an injunction to
stop the boycott and/or compensation for damage sustained by that party. In
addition, if an organisation continues an illegal boycott fines can be imposed
upon it.
Protests boycotts and sections 45D and E
The Democrats support the existing exclusions from the
purview of the TPA:
- boycotts by consumers or consumer groups;
- boycotts for the purposes of environmental action; and,
- peaceful protesting, including on human rights issues.
These protest actions are all
permissible under the law.
Secondary boycotts occur when an
organisation (for example, a union or a company) that is in dispute with a
second organisation, acts in some way to harm an often unrelated third party.
This can happen where ‘sympathy strikes’ by other unions against other
employers occur in support of a particular union involved in a particular
industrial dispute. Secondary boycotts can therefore harm innocent third
parties that have done nothing to deserve such treatment.
In 1996, as part of its new
Workplace Relations Act, the Government sought to continue the prohibition on
secondary boycotts. The Democrats supported that, and negotiated improvements
to the Act to ensure that it would operate fairly. Some of the improvements
achieved in relation to secondary boycotts were:
- Boycotts by consumers or consumer groups of particular products
for any reason (e.g. to protest the human rights stance of a company, or
nuclear testing by a country) are excluded from the Act;
- Boycotts for the purposes of environmental protection are
exempted from the Act;
- Boycotts about employment-related disputes are exempted from the
Trade Practices Act and are dealt with under the Workplace Relations Act;
- Courts must consider whether a dispute could be resolved by the
Australian Industrial Relations Commission before making any orders;
- Peaceful protesting is not regarded as boycott activity by the
Courts.
At the time,
the Australian Greens tried to attack the Democrat improvements to the Act, and
made exaggerated and erroneous claims that the law eroded protest rights, but
they were wrong. Since their inception no action has been taken under these
provisions against any environmental, consumer or human rights group.
New interpretations a danger?
When a bill with similar
provisions to the Trade Practices Amendment (Small Business Protection) Bill
2007(the Bill) was before the Senate in 2002, I again discussed and again dismissed
the possibility that these provisions could be used to stop people protesting
about other issues, because such protests would not be regarded as boycott
activity by the courts. These would include issues such as protesting about
live sheep exports or protesting against logging old growth forests.
The Object of the Act states:
The
object of this Act is to enhance the welfare of Australians through the
promotion of competition and fair trading and to make provision for consumer
protection.
The purpose of the TPA is clearly
to protect competition and consumers; it is not about limiting freedoms of expression
or association.
The question is whether new
interpretations might constitute a danger. Since 2002 the TPA has been used
for some things that some might not have expected. There is the action for
misleading and deceptive conduct being brought by Alan Bond against News
Limited in relation to an article published in a News Limited paper. The action
would traditionally be seen as a defamation action; however it is being taken
to test the limits of section 65A of the TPA, which is currently believed to
protect media organisations and freelance journalists from liability under the
TPA.
That matter has not been decided
yet, and the Court’s decision on that may give us some indication of the extent
to which the TPA can be manipulated to cover matters which were not originally
envisaged in the objects of the Act.
This danger
of new interpretations is illustrated by a statement by the Treasurer, who, as
can be seen below, clearly believes a more expansive view of the TPA can be
taken without changing the law at all.
An inflammatory statement
To date the secondary boycott
provisions have not in any way stifled environmental, human rights, spiritual,
cultural or consumer protest. Rather, they have provided a positive guarantee
of the right to protest.
Unfortunately the federal Treasurer
decided to upset the applecart. The speech by the Treasurer at the 2007
Pastoralists and Graziers Association of WA Centenary Convention referred to
the reforms to the TPA in this Bill.
The part of his speech which of most
concern to me was, and I quote:
Other
reforms underway include amendments to enable the ACCC to bring representative
actions for breaches of the secondary boycott provisions of the TPA. A
secondary boycott involves action by two or more people acting in concert which
prevents a third party, such as a potential customer or supplier, from dealing
with or doing business with the target. These kinds of boycotts are commonly
organised by unions or single issue protest groups. One such campaign has been
led by People for the Ethical Treatment of Animals (PETA), who are campaigning
for the boycott of Australian wool in protest against mulesing of sheep......
You
would be aware that the campaign has given rise to legal action by Australian
Wool Innovation against a boycott of Australian wool by the PETA. The
Government’s reforms would enable the ACCC to bring representative actions on
behalf of wool growers in cases like this. This would protect Australian
farmers from these boycotts.
This statement made me very
uneasy. I was and am convinced that this legislation could not be used to prevent
legitimate protests of a kind well established historically, on issues that deeply
concern our community or sections of it.
Was the Treasurer saying that a
future pliant ACCC head, appointed under the Australian patronage system,[1]
with funding provided for that specific purpose by a Government, could harass
democratic protest with threatened or actual legal action?
I think this example may be
reaching a yard too far, but for arguments sake, if, as the Treasurer was
saying in that statement, the TPA can be used to stop people protesting about
mulesing, then is there any reason to believe it could not be extended to Right
to Life protestors running a boycott action against an abortion clinic that is
operated as a small business?
Under the federal Treasurer's
inference, Right to Life protestors would be inhibiting a small business from
conducting its business as well as impacting on consumers who are trying to
utilise the services of the abortion clinic.
So, under the federal Treasurer's
inference, this legislation could impact on people’s right to protest on or
boycott businesses engaged in mulesing or abortion.
Perhaps the Treasurer realised he
had gone too far. There is no mention in the Treasurer’s second reading speech
of this use of the legislation to stop protest action against mulesing.
However, you have to ask yourself, if the court is looking at extraneous
material for interpretative purposes, would they look to his statements in the
speech to the Pastoralists & Graziers’ Association and accept that the
responsible Minister says that this is a use to which Section 45 of the TPA
could be put?
Because this matter has now been
distorted by the Treasurer’s comments, the precautionary principle requires
amendments or a legislative note to make it crystal clear that section 45 has
not changed in character and does not inhibit people’s freedom of expression or
association, whether that is by way of boycotting certain products as a form of
protest, or physically protesting about them.
Recommendation 1: That an amendment or
legislative note be constructed to make it clear that section 45 does not
inhibit freedom of expression or association, or the freedom for consumers to
protest on issues, or boycott products, whether or not they impact on trade or
commerce.
Representative actions
These provisions in the Trade
Practices Amendment (Small Business Protection) Bill 2007are
misnamed ‘small business protection’. It would be more appropriate to call this
bill, 'ACCC representative actions', because that reflects the actual content
of the bill.
The purpose of the bill is to
enable the ACCC to bring representative actions on behalf of people damaged by
conduct in breach of the sections 45D and 45E, the secondary
boycott provisions of the TPA.
There are already restricted
provisions in the TPA to take representative action under the Federal Court
of Australia Act. These two section 45 provisions are presently excluded
from the provisions of section 87 of the TPA which allows the ACCC to bring
representative actions in respect of contraventions of Part IV of the TPA,
which governs these areas. This bill will remove that exclusion.
According to the Explanatory
Memorandum the Bill proposes to give small businesses and individuals access to
representative action with respect to Section 45. The wording of the bill does
not limit itself to just representing small business. As the bill is currently
constructed the ACCC could take action against unions on behalf of big business
at public cost.
The Australian Law Reform
Commission first recommended giving the ACCC the power to take representative
action on behalf of people and businesses in 1994. The Reid[2]
and Baird[3]
Committees supported this measure. Although this is the Coalition's fifth
attempt to introduce representative action powers since 1998, with the
exception of section 45 the Coalition succeeded with respect to the rest of the
Act in 2001.
The Democrats have long supported
giving weak parties, such as individuals and small business, better access to
justice through the device of representative action. Of course, neither this Bill
nor previous bills limited representative action to small business and
individuals. As I said earlier, although considered unlikely, both with this Bill
and previous bills, their provisions allowed the ACCC to take action against
unions at public cost, on behalf of big business.
Business should not look to the
Australian Consumer and Competition Commission to initiate or fund actions
against unions that do not involve competition issues. The Democrats have
previously rejected attempts to change the law to allow the ACCC to do this.
The Democrats had held that if a
business wished to take legal action against those undertaking secondary
boycotts, then the business should pay for it, not the taxpayer. Since the
ACCC's inception and under Mr Fels, it had been the view of the ACCC that
business must fund its own actions in this regard.
That may not be as big an issue
as some think. As some submissions show, under the TPA the ACCC can pursue
representative actions in relation to several other sections of the Act, but as
pointed out in several submissions (in particular from Associate Professor
Zumbo) the ACCC has shown itself wary of taking representative actions in the
past, where it already has the capacity to do so. So on past practice there is
perhaps little reason to believe that the ACCC will fully embrace the
opportunity to take representative actions as provided in this new bill.
The ACCC's record of actually
mounting these actions is extremely limited. The ACCC seldom takes
representative actions and often does not seek findings of fact to allow others
to use successful ACCC action. It is not a matter of resources but of practical
issues. It is questionable therefore whether extending the right to take
representative actions to sections 45D and 45E will mean that the ACCC will
utilise taxpayers' funds to do just that. History would suggest that it won’t.
In the second reading speech the Treasurer
stated that ACCC would take into consideration a number of factors in
determining whether it would bring a representative action, including whether
those affected had sufficient resources to bring actions themselves. He said "these
reforms will be of particular benefit to Australian small businesses that often
do not have either the time or resources to commence legal action.”
Although the Treasurer says this,
it is not reflected in the wording of the legislation. If the Treasurer was
serious about this section just protecting small business then a definition of
small business, or the types of business on whose behalf the ACCC could take
action, would be identified in the legislation.
Recommendation 2: This representative action is applicable only
for small business and individuals; and, a small business is to be defined as
one with a $5 million asset base or one that employs less than 20 people.
The bill will put a small
business on a par with larger businesses in terms of access to justice, and
that is a virtue of the bill. Having the ACCC represent individuals and small
businesses would overcome size and resource constraints, improving effective
access to an existing law for the very few - numbering on one hand - who might
be expected to take advantage of the new law.
On the grounds of access to
justice, there is attraction in the idea of a representative action power but
there is little real identified need. I accept that the bill may result in
some deterrent effect. Overall the bill is of low policy but high symbolic
significance - it is what I would call a high totemic issue for the Coalition
Government.
The Federal Magistrates Court
The evidence is that if the ACCC
gets the power that is in the Bill small business should really not expect much
from it. Of much greater use would be the suggestion proposed in the Senate
Small Business TPA report (see below), where action for both the breach and
damages should be able to be taken in Federal Magistrates Court.[4]
Give the ACCC and private litigants the power to go to the Magistrates Court -
and not just in secondary boycotts but all the relevant competition provisions.
In that Senate report the
Committee recommended:
Recommendation 17
The
Committee recommends that the jurisdiction of the Federal Magistrates Court be
extended to enable it to deal with Misuse of Market Power (s.46 and s.46A where
cases rely upon s.83), Contravention of Industry Codes (s. 51AD) and
Unconscionable Conduct (Part IVA).
That recommendation was supported
by the Government Senators on the Committee, so it is unclear why that
recommendation has not been included in this legislation.
Such an amendment would enable
small business or individuals to access lower and cheaper courts, which could
act in tandem with the provisions for the ACCC to take representative actions.
With regard to the specific
question of whether or not both ACCC representative actions and access to the
Federal Magistrates Court should be available to small business, the Committee
received the following letter from COSBOA:
Response
to the Chair of the Senate Inquiry into the Provisions of the Trade Practices
Amendment (Small Business Protection) Bill 2007
There
are two issues: one being the Bill as tabled giving the ACCC the right to take
representative action in these sections, the other being access by private
litigants to take action in a lower and cheaper court.
We
feel there is a case for both.
We
would not like to see the bill held up but we do see a need for the Parliament
to be made aware that the ACCC rarely takes up its option to take
representative actions.
The submission by Frank Zumbo has the right idea but does not split the two issues.
COSBOA feels the ACCC should be given the right to take representative action
in respect of Section 45 (D) and (E) and then also be strongly encouraged to be
much more proactive. Plus we feel the Federal Magistrates Court option could be
available to private litigants as an easier and cheaper option in order to
ensure justice.[5]
COSBOA is not the only small business organisation that agrees with this
approach. As Associate Professor Frank Zumbo noted in evidence to the Committee
in November 2003:
If you
extrapolate that out into a federal magistrates context, where there is an
emphasis on alternative dispute resolution such as mediation, we are comforted
that there would be a low-cost and user-friendly forum where these players can
get together at a minimal cost. In many cases it may not be a technical issue
about what ‘unconscionable’ means that is causing the problem but, rather, a
communication breakdown between the parties. That facilitates that, and often
you will not see endless appeals in those cases, because the parties are often
close in terms of bargaining power or, if they are not, the issues are best
dealt with in that forum anyway. These are ongoing relationships. These are
contractual relationships where the parties have an interest in continuing
their good relations. We believe that that is a great, low-cost forum to deal
with these issues expeditiously.[6]
The Committee should have supported
the unanimous recommendation of the 2004 Committee. I will therefore repeat
that recommendation:
Recommendation 3: That Recommendation
17 of the March 2004 Senate Economics Committee Report extending the
jurisdiction of the Federal Magistrates Court, be included in this Bill.
Conclusion
In conclusion, the Democrats will support this Bill if
Recommendations 1 and 2 are acted on.
Senator Andrew Murray
Australian Democrats
Senator for Western Australia
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