July 26, 2022
Australian Small Business and Family Enterprise Ombudsman Bruce Billson has welcomed the Federal Government’s move to introduce legislation to ban unfair contract terms for small businesses.
“This is a real problem for small and family businesses and it is very pleasing to see this election commitment being progressed so quickly by the Small Business Minister Julie Collins and the Assistant Minister for Competition, Charities and Treasury Andrew Leigh,” Mr Billson said.
The Federal Government plans to introduce civil penalty provisions “outlawing the use of, and reliance on, unfair terms in standard form contracts”.
Mr Billson said he has personally met many small businesses who have highlighted this problem.
“We see in many contracts we review, examples of unfair terms. This is an area ripe for change,” Mr Billson said.
“Power imbalances between small business and large enterprises are exacerbated by unfair business practices and unfair contract terms.
“Addressing these issues will aid in rebalancing these relationships and promote economic growth.
“I encourage large enterprises doing business with smaller firms to be a kindly customer – patient and understanding, with good and generous intent, especially around contract terms.
“Small businesses are run by real people who deserve our respect and empathy every day.”
Mr Billson said he also welcomed the government’s move to update the definition of a small business in this legislation to increase the eligibility threshold from fewer than 20 employees to fewer than 100 employees, and introduce an annual turnover threshold of less than $10 million as an alternative threshold for determining eligibility.