Ken PhillipsWednesday, 27 June 2012 12:54
New South Wales Government Small Business Commissioner Consultation Paper For Sole Traders: Ken Phillips Blog
NSW lends muscle to soloists
This week the New South Wales Government released a consultation paper on the proposed powers for its small business commissioner. It's outstanding.
It doesn't extend the powers to dispute determination but gives the commissioner real “grunt” in requiring large business and government departments to engage in genuine dispute mediation.
Further, the commissioner will have the power to initiate or be involved in litigation on behalf of small business people against large business/government.
We strongly support the proposed model. It will give small business people a considerable power balance with big business/government.
But it's just a proposal and needs significant support to become law.
Here's the consultation paper and the NSW Government's feedback questionnaire.
We encourage you to answer the questionnaire and we are preparing further analysis and commentary.
Summary of the proposed powers
It is proposed that the NSW small business commissioner will have powers to assist small businesses in dispute with large businesses or government bodies.
The emphasis is on mediation. That is for the commissioner to encourage and assist parties to agree on a resolution.
The commissioner will not have powers to impose a resolution. If parties ultimately cannot agree, they can go through the normal court processes.
However, the commissioner will have powers that encourage or require parties to engage in genuine discussions aimed at achieving resolution to a dispute. (From the consultation paper; "some big businesses and government bodies will only respond to matters raised with them by the commissioner if they are required to do so by the law.")
The NSW Governor appoints the commissioner. In other words, the commissioner is appointed independently of the public service.
The commissioner can investigate possible unconscionable conduct or unfair practices against small business with or without complaints being lodged.
Mediation requirement powers
The commissioner can require the provision of information or for someone to answer questions.
What is said in mediation is confidential and cannot be used in any possible court proceedings.
The commissioner can issue public warnings about unfair practices.
Legal proceedings and "collective" issues
If the commissioner thinks significant unfairness has occurred and mediation has failed, the commissioner can intervene in or initiate legal proceedings for small businesses, including cases covering a 'collective' issue.
The commissioner will be able to enter agreements with government bodies which commit a government body to enter dispute mediation if requested by the commissioner.
The commissioner will have the ability to investigate state and local government treatment of small business and issue reports.
Big businesses will be able to be registered as 'small business friendly', undertaking to treat small businesses fairly and to engage in mediation for dispute settlement.
Codes of conduct
The commissioner can develop and administer codes of conduct for specified industries.
The commissioner can assist groups of small businesses to engage in collective bargaining with large businesses.
Here are some quotes from the small business consultation paper on a few key areas
Dispute resolution powers and mediation
“Whilst many cases will be able to be dealt with informally in this way, there is a strong need for the legislative provisions set out in this Paper, because it is acknowledged that some big businesses and government bodies will only respond to matters raised with them by the Commissioner if they are required to do so by the law. The legislation is therefore a last resort option to be used by the Commissioner only when all other methods of bringing parties together have failed. This legislation is critically important because it is in those instances that proposed legislation will bring fairness back into the equation.”
Big business/government using their large financial/organisational powers:
“Often in these cases larger businesses or those with more resources, are not motivated to change their behaviour, because small businesses are not typically in the financial position to take matters to court, do not have the time or skills to gather evidence of breaches of competition law, or fear retribution if they take action or make a complaint.”
Small business needs help to assert their commercial rights
“The Commissioner has also received feedback from the small business sector that they need assistance in their dealings with State and local government bodies when they feel that they have been dealt with unfairly.”
“The role of the Small Business Commissioner is critical, as the Office of the Small Business Commissioner is responsible for providing low cost mediation services for small businesses to keep disputes out of court - as small business can often not afford to pursue costly and lengthy legal action. The Commissioner also operates a free service which assists small businesses to navigate through government and obtain answers to specific problems and reduce bureaucratic red tape more generally.”
Working with big business/government
“The Commissioner must develop strong working relationships with big businesses, as well as with small businesses. By earning the trust and respect of big business, the Commissioner will be able to help resolve issues between big and small businesses, to the benefit of both parties.”
“The Commissioner's advocacy role for individual small business cases is limited to those instances where there is an allegation of 'unfair' or unconscionable treatment of a small business.”
Making dispute resolution simpler and low cost
“The role of the Office of the Small Business Commissioner is not to take sides or make a judgement about which part is right or wrong, it simply provides a starting point for small businesses to access low cost mediation services which allow parties to a dispute to resolve a situation without the need for time consuming, costly and complex legal action.”
Still can go to court
“When mediation is undertaken through the Office of the Small Business Commissioner, neither party will be forced into making a decision or a commitment they do not agree with. In some cases, if mediation is unsuccessful despite the best efforts of both parties, it may be necessary for the matter to progress to another level, such as a tribunal or court.”
Proposed legislation features
“The Commissioner be an independent statutory officer with the appointment and removal of the Commissioner made by the Governor of NSW.”
“The Commissioner, the Commissioner's staff, and mediators receive protections and immunities from liability when exercising functions under the Act in good faith.”
Investigate unfair practices
“Investigate complaints which can be received by the Commissioner or investigate matters of the Commissioner's own volition, regarding allegations of unconscionable conduct or unfair practices affecting small business and facilitate resolution of such complaints or matters. This may include working collaboratively with other bodies and referring matters where appropriate.”
Can require the provision of information or to answer questions
“The ability to require information from a person within a specified timeframe, in relation to dealings with small businesses which are consistent with the functions of the Commissioner.”
“The ability to require a person to answer questions and otherwise assist in a matter, within a specified timeframe, to allow the Commissioner to exercise his or her functions.”
“The ability to seek an injunction from the Supreme Court to ensure conduct by a person, business or state or local government body does not affect an ongoing investigation.”
Issue public warnings
“The ability to issue a public warning statement or an alert about matters that affect small business, where it is in the public interest.”
Conduct legal proceedings
“The ability to initiate proceedings, of the Commissioner's own volition, in a case relating to anti-competitive conduct with respect to a small business.”
“The ability to make representations, or join an action, in civil proceedings brought before a court, in matters of the public interest.”
“To ensure government bodies understand the importance of participating in mediation with a small business in relation to a small business dispute, it is proposed that the Small Business Commissioner will enter into a Memorandum of Understanding with government bodies which will require them to participate in mediation at the formal request of the Small Business Commissioner.”
“To encourage private sector businesses to attend mediation with a small business in relation to small business disputes, it is proposed that private sector businesses will have the opportunity to be recognised on a published list of ‘small business friendly’ organisations.”
“The ability to utilise a mechanism, a ‘collective complaint’, to investigate an issue that has the potential to significantly harm the interests of a group of small businesses.”
State or local government
“The discretion to conduct an investigation into the treatment of a small business by a State or local government body.”
Sharing information with other bodies
“Arrangements which allow the Commissioner to share information with other complaint-handing bodies.”
Codes of conduct
“The ability to develop and administer an industry code which regulates the relationships between businesses in a particular industry to enable the Small Business Commissioner to assist small businesses in their dealings with larger businesses. This approach has been adopted in South Australia.”
“The ability to assist small businesses in the use of the collective bargaining provisions within the Competition and Consumer Act 2010, so that they can benefit from having a collective voice.”
Ken Phillips is the executive director of Independent Contractors Australia and author of Independence and the Death of Employment.
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