ACCC to focus on unfair contract terms and practices in construction industry

Published: 07 March 2019

Last week the Australian Competition and Consumer Commission released their compliance and enforcement priorities for 2019, which included furthering work on unfair contract terms and dealing with unfair business practices in commercial construction markets.

The commission is also advocating for statutory protections against unfair contract conditions and the introduction of penalties for their inclusion in standard form contracts.

Earlier this year, the AMCA met with representatives of the ACCC's Commercial Construction Unit to discuss the role and scope of the commission in relation to the building and construction industry, and to convey some of the challenges being faced by AMCA members.

'As it stands, the ACCC is limited in what they can do with respect to unfair contract terms in the commercial construction industry,' said AMCA Policy and Communications Manager, Ben Hawkins.

'The CCU can initiate investigations into unfair contract terms under the Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Act 2015; however, contracts must meet certain thresholds.'

'The contract must be deemed of a standard form, the complainant business must have less than 20 employees, and the contract value can only be up to $300,000 or $1 million dollars if it runs longer than 12 months.'

'As we said in our submission to last year's Treasury Review, these thresholds have the effect of excluding many contracts that AMCA members are party to.'

While current legislation does impose limits on the types of action they can take, the ACCC has emphasised the importance of building an evidence base for policy change.

'It is important for specialist contractors to raise concerns when they feel like they have been pressured into unfair contract conditions. This could be through the ACCC or via the AMCA. The more information we have about unfair practices, the better equipped we are to advocate for a change in policy'.

AMCA members can report a small business issue using the ACCC online form or by calling the small business helpline on 1300 302 021.