Update - Franchise Code Amendments for Motor Vehicle Dealers

MTA NSW members, please see the below update:

From 3 June 2021, Motor Vehicle Dealers can take advantage of the class exemption for collective bargaining

This exemption will allow motor dealers to join together as a group to collectively negotiate with a distributor, without the risk that the bargaining group will be engaging in anti-competitive conduct.

Competition laws usually prevent businesses who are competitors from engaging in collective bargaining unless they have prior written approval from the ACCC, in the form of express authorisation. The class exemption enables dealers from the same brand to approach the distributor to seek its consent to engage in collective bargaining as soon as the bargaining group informs the ACCC by lodging a one-page notice form thereby avoiding the existing authorization process which is often a costly and long process.

The class exemption does not compel a distributor to agree to negotiate with the bargaining group however, as outlined in our Motor Dealer Guide in section 5.4 there are mutual benefits for the bargaining group and the distributor to engage in collective bargaining to address common issues or concerns shared by the dealers.

This process will be particularly helpful for groups of dealers who want to negotiate the terms of standard form dealer agreements or changes to their operating model with their distributor. The power imbalance that exists in the relationship between distributors and dealers makes it is difficult for individual dealers to obtain fairer outcomes when approaching a distributor to negotiate an issue.

Resources to assist you

· Collective Bargaining Fact Sheet for Motor Vehicle Dealers
To assist you in understanding the collective bargaining process better, and highlight some practical considerations when utilising the class exemption.

· Our Road Map for Dealers outlining how to improve their bargaining position
A summary of the different circumstances in which it may be beneficial for dealers to use the class exemption to assist in decision-making.

If you’d like more information on any of these updates, please don't hesitate to contact us.

Sotheary Bryant
Principal Lawyer & Head of Commercial
Email Sotheary

Robert Gardini
Senior Consultant
Email Bob



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