The Australian Competition and Consumer Commission is hailing its enforcement of unfair contract terms laws that were recently extended to cover small businesses as a success.

Since the laws were introduced in November last year, the ACCC has successfully taken action against a national company and has commenced proceedings against another.

It has also stepped up its education campaign, engaging with businesses in efforts that have seen tens of thousands of new or existing contracts improved.

ACCC Deputy Chair Michael Schaper says this is just the tip of the iceberg as Australia’s two million small businesses sign an average of eight standard form contracts a year.

Schaper says the ACCC is serious about enforcing the new laws and would continue to take action to ensure small businesses were protected.

“We’re pleased with the level of engagement and cooperation we have seen from some traders over the past year, but we are also continuing to receive a steady flow of complaints from small businesses indicating there’s still a good deal of work left to do,” he said.

“Where small businesses think they are being asked to sign a contract that puts them in a greatly disadvantaged position to the company offering the contract, they should ask that the contract be changed.

“If the company won’t change the contract terms, they should make a report to the ACCC.”

Four common types of terms small businesses should look out for:

  • automatic renewal terms binding customers to subsequent contracts unless they cancel the contract within a certain timeframe
  • terms allowing a trader to unilaterally increase its prices or alter the terms and conditions of the contract
  • terms that broadly limit a trader’s liability towards a small business, or which require a small business to indemnify a trader in an unreasonably broad range of circumstances
  • terms that allow traders to cancel or terminate an agreement without cause.

Payroll pain

It’s not all good news for WA small businesses this month, however, following the voting down of an amendment to lift the payroll tax threshold from $850,000 to $1 million.

The Nationals introduced the amendment to reduce the impact the Labor’s payroll tax hike on 1300 of WA’s biggest businesses, announced in its State Budget and effective from July next year.

The hike will be passed down the supply chain and CCI modelling suggests it will wipe out between 1334 and 5297 WA jobs in the first year and at least $510 million will be lost from economic output.

View the payroll tax modelling here for full details.

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