Non-compliance with South Australian industry codes may mean fines for franchisors

14 November 2011 Topics: Franchising

On 20 October 2011, the Small Business Commissioner Bill 2011 was passed, creating controversial and unprecedented powers for the South Australian Small Business Commissioner (SBC).

Under the new provisions, the SBC can prescribe industry codes as regulations for the purposes of administering them as law. To enforce these new powers, the SBC can impose fines for:

  • failing to provide the SBC with information (including personal, financial or business information and trade secrets) when requested – up to $20,000; and
  • contravening a provision of an industry code that has been prescribed by the SBC – up to $10,000 for individuals and $50,000 for companies.

The SBC must consult with industry representatives before prescribing an industry code.

South Australian businesses (particularly franchises) should ensure they are compliant with the applicable industry codes (for example, the federal Franchising Code of Conduct) as their requirements under such codes may soon be enforced by the SBC, as well as the ACCC. Businesses need to keep up to date with changes to applicable codes as South Australian requirements may become different to national requirements. With the introduction of the SBC it is now possible for both the ACCC and SBC to investigate complaints concurrently; the potential overlap is still unclear.

Industry stakeholders now await the date for the new legislation to come into force.

For further information please contact Carly Ashwood or Lara Dawson.

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