The Morrison government must bring on legislation reforming unfair contracts when federal parliament resumes next week, the National Road Transport Association said today.
Treasury released an exposure draft of a reform Bill in August last year, proposing a number of significant reforms aimed at strengthening protections for small businesses in relation to unfair contract terms.
Key reforms included:
- prohibiting the use, application and reliance on an unfair term
- providing courts with the power to impose a financial penalty for a contravention
- expanding the protections to capture a larger number of small businesses
- creating a rebuttable presumption that a term is unfair if a court has already found a similar term used in similar circumstances is unfair.
That consultation followed a decision in November 2020 by Commonwealth, state and territory consumer ministers to make unfair contract terms unlawful and give courts the power to impose a civil penalty, as well as strengthening the regulator’s powers.
“We’ve been waiting years for action on unfair contracts,” said NatRoad CEO Warren Clark.
“After the struggles of Covid, unfair contract terms remain a major concern for many NatRoad members whose livelihoods are put at risk by the imbalance in favour of big corporates.”
Clark said NatRoad backed the regulator being given more power because small business members are reluctant to damage commercial relationships.
“They lack resources to pursue legal remedies, and often are unaware of how to challenge an unfair contract term under the current law.
“Consequently members currently rarely take action when faced with an unfair term in a standard form contract that’s provided to them on a ‘take it or leave it’ basis.”
Clark said NatRoad strongly supported the amendments to provide more flexible remedies to a court when it declares a contract term unfair.
“The reforms that have been well thought out and the subject of a great deal of stakeholder feedback should have bipartisan support.
“Most importantly the changes will introduce a financial penalty and increase the number of small business contracts to which these laws apply.
“The urgency of reform cannot be underestimated.”
Senator Glenn Sterle’s recent inquiry into the road transport industry also recommended more contract protection for operators, including the establishment of an independent body to help with dispute resolution.