Consumer Protection

Respect for Fair Trading & Consumer Protection: Wishlist item or professional development goal?

Andrew C Wood Codes of Conduct, Consumer Protection, Contract, Employment Agents, Employment Services Agreements, Recruitment Tags: , Leave a comment

In our TuesdayTalkAbout Live! masterclass this week, we looked at some experimental drafting of a clause, which might be adopted by recruitment & staffing agencies who were looking to stand out from the pack in terms of demonstrating that, for them at least, respect for Fair Trading & Consumer Protection matters.

Here’s the draft we discussed:

“The Agency warrants that its internal staff, who handle recruitment briefs for the Client or represent Workseekers, have satisfactorily completed relevant Consumer Protection and Fair Trading compliance training in the last two years.”

Experimental drafting 20/03/2023. Not to be used without legal advice.

Would you be willing to have a clause like that in your terms of business? How would you respond to a client, who asked for its inclusion? What would a refusal convey to your client (or to your candidates or contractors)?

What challenges would compliance with such a clause present for recruitment & staffing agencies?

Let’s talk it through…

The draft clause assumes that agency staff, who carry out recruitment tasks, need to know something about fair trading & consumer protection. There’s nothing novel about that. So much is expressly stated in the Qld regulatory scheme for private employment agents, where it first appeared in 2003.[i]

It also assumes that workseekers, as well as clients, have the benefit of fair trading & consumer protections. Again, there’s nothing novel about that. Agencies claim to “represent” their workseekers. They supply their representation services. That can be a consumer supply, even though the workseekers don’t pay.

Consistently with most industry association codes for professional conduct, the clause recognizes that respect for fair trading begins with gaining some knowledge about it, and that it is an agency responsibility to do something about it.

In the experimental draft, I described the training as “compliance” training. I’m not sure that would be my preferred description. I think I’d prefer to use a term such as, “professional development” training. That would convey more to me about the significance of this training (and of its absence) in shaping professional identity and competence.

What do you think?

Let’s talk…

Andrew C. Wood

[i] See, currently, Private Employment Agents (Code of Conduct) Regulation, 2015 (Qld).

Just for the sake of argument …

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I can’t begin to recall the number of times I’ve heard contracting parties (or their advisors) discussing “problem” clauses and someone says, “Let’s just put it in anyway. It’ll give us something to argue!” By any measure, it’s a lazy approach to drafting. It’s all very well to have the argument, but if you lose, you’ll end up with egg on your face … as well as costs orders against you; and potentially negligence claims – to say nothing of the damage you might have done to your commercial relationships whilst you have that argument. And now it’s got a whole lot worse…

That’s because New Zealand (in August 2022) and Australia (from November 2023) have amended their Fair Trading and Consumer Protection laws to prohibit the inclusion of unfair terms in standard-form, small business (or small trade) contracts.

And the consequences for ignoring the prohibition? In New Zealand, $600,000 per contravention. In Australia, $50 million per contravention, or three times the value of the benefit derived from the unfair term, or 30% of adjusted turnover during the offence period. And there are fines for the individuals who were involved in their inclusion, as well.

Is that the argument you really want?

#FairTradingMatters.

Andrew C. Wood

#FairTradingMatters

Andrew C Wood Uncategorized Tags: , , , Leave a comment

Over the last few weeks, as we’ve been exploring the topic of Fair Trading & Consumer Protection for Australian & New Zealand Recruitrers, I’ve been posting some discussion primers on social media in preparation for our Tuesday TalkAbout Live! masterclasses. I’ve now gathered them here in one place so you can find them more easily.

Do any of them strike a chord with you; or ring alarm bells? If so, which ones stand out?

Let’s talk again, soon!

Andrew C. Wood

Time to Wake Up to the Risks of Unfair Terms in Professional On-Hire Contracts!

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For years, we thought that we were “astute”, using one-sided professional on-hire contracts that were stacked in the agencies’ favour.  Clients wanted compliant professional labour without the costs of employment; and on-hire agencies developed business models that met, and continue to meet, that demand  – despite the inherent risks.

It should have changed as the professional contracting sector came under increasing competition from contracting platforms such as UpWork and Fiverr. It should have changed; but it didn’t.

It should have changed in 2016, when the Australian Consumer Law was amended to prohibit the use of unfair terms in standard form, small business contracts, because the independent contractors were supposedly in business on their own account. It should have changed; but it didn’t.

It should have changed in June 2021, when the ACCC granted a class exemption to allow small businesses, including professional contractors, to bargain collectively on price, terms and conditions without breaching competition law. It should have changed; but it didn’t. Though there are some encouraging signs that the bargaining exemption is being adopted by health and medical professionals and by IT  professionals.

It should have changed in February 2022, when the High Court said that if you’ve set yourself up as a mere purveyor of subservient, dependent, and compliant labour, and your contractor’s promise to perform work is a “core asset” of your business, then you’re looking a lot like an employer.[i] It should have changed; but it didn’t.

In New Zealand, it should have changed in August 2022, when amendments to the Fair Trading Act, which prohibited the use of unfair terms in standard form, small business contracts, commenced. It should have changed; but it didn’t.

It should be changing as the professional contracting sector is increasingly impacted by AI-driven technologies. Ask any recruiter about the ace-up-their-sleeve against being superseded by AI-driven technology, and they’ll tell you that it has something to do with their human touch and their contractor care programs. Well, if that’s right, it should be reflected in their contracts. It should be changing; but it isn’t.

Perhaps it will change in November this year, when the Australian Consumer Law will once again be amended to increase penalties for having unfair terms in standard form, small business contracts to $50 million.

Perhaps it will change; but my guess is that, unless the professional contracting on-hire agencies wake up to the changes that have taken place in their sector over the past decade, and stop using engagement and supply models developed in the 1980s, it probably won’t … at least not until their clients and contractors also wake up to the political, economic, social, and technological environment in which they’re now operating.

 

Post Script: Throughout February 2023, I was privileged to conduct a sustained Tuesday TalkAbout Live! masterclass exploration of issues facing professional contracting on-hire agencies. In March, I will be extending that exploration by taking a deeper dive into the Consumer Protection & Fair Trading regulation of the sector in Australia & New Zealand.  One of the outcomes of our March masterclasses will be the development of a methodology for conducting a Consumer Protection & Fair Trading self-assessment. In April, we will shift the focus of our exploration into the field of competition regulation and explore ways to take advantage of exemptions and authorisations that facilitate the development of innovative supply models.

I hope you’ll take time to follow our exploration and participate in one of the sessions.   

Let’s talk again, soon!

Andrew C. Wood

[i] CFMMEU v Personnel Contracting (2022) HCA 1.

Consumers don’t only buy fridges!

Andrew C Wood Consumer Protection, Employment Services, Recruitment Tags: , , Leave a comment

Few expressions do greater disservice to fair trading in business than the term, “consumer protection”. That’s because consumer protection laws were first framed to protect purchasers of goods and services for personal, domestic or household use. That use qualification still holds good in many jurisdictions; but over time, the protections have been extended to encompass a wide range of business-to-business transactions … some of which may suprise you!

So, throughout March, I’ll be conducting a series of Tuesday TalkAbout Live! masterclasses on the topic of Consumer Protection and Fair Trading for Australian and New Zealand Recruiters.

Topics that we’ll cover include:

  • Job ads
  • Job offers
  • Agency promotion & service claims
  • Services guarantees
  • Refunds
  • Price gouging
  • Sharp practice & unconscionable conduct
  • Unfair terms
  • Indemnities & exclusions
  • The role of codes of professional conduct & ethics.

And to prime your knowledge of the topic, I’ll be sharing and discussing key features of the protections in this forum and through my social media channels.

I do hope you’ll join us.

Let’s talk again soon!

Andrew C. Wood

VCAT dismisses misleading & deceptive conduct claim against recruitment agency

Andrew C Wood Consumer Protection, Contract, Employment Agents, Employment Services Tags: , Leave a comment
Photo by Sora Shimazaki on Pexels.com. Woman advocate carrying brief, leaving court.

Notre Vie Enterprises Pty Ltd V Saturnian Pty Ltd[i] is a recent VCAT matter that involved a public relations business, which engaged an employment agency to find a personal assistant for it.

The client claimed that the agency recommended an unsuitable candidate, who resigned after two weeks. It also claimed that the agency’s shortlisting decision was biased in favour of the successful candidate because of a prior work relationship between the agency’s consultant and the candidate, which was not disclosed until after the first round of interviews. The client sought a refund of $3,960 based on the misleading and deceptive conduct provisions of the Australian Consumer Law (ACL). It did not contend, and the Tribunal did not find, that the agency breached any of the statutory guarantees in the ACL.

The agency denied the allegations and argued that its shortlisting decision was based on objective evidence.

The Tribunal found that the successful candidate was given preferential treatment due to the former work relationship with the agency’s consultant. It also found that the agency failed to re-advertise the position as it was required to do under the contract.

However, the agency argued that, although the applicant had the benefit of a 100% satisfaction guarantee in the contract, the client chose not to use it and managed to a replacement by itself within 48 hours.

In the circumstances, the Tribunal found that the client did not prove that the agency engaged in misleading or deceptive conduct, and therefore was not entitled to a refund.

The application was dismissed.

The decision serves as a useful reminder that good arguments and correct statements of legal principle do not win cases if they are not supported by the facts.

Andrew C. Wood

[i] Notre Vie Enterprises Pty Ltd v Saturnian Pty Ltd (Civil Claims) [2023] VCAT 95 (31 January 2023)