South Australia will shortly have a Small Business Commissioner to advocate on behalf of small business following the passage of legislation through State Parliament this week.
The Bill provides for the creation of a Small Business Commissioner, as well as the legislative framework for prescribing Mandatory Codes of Conduct under the South Australian Fair Trading Act.
State Labor Member of Parliament, Tony Piccolo said the Bill also provides for civil monetary penalties for breaches of prescribed codes of conduct under the Fair Trading Act and for civil expiation penalties.
Civil expiation notices provide a quick and easy way for the Commissioner to impose a penalty without having to go to court (as the Commissioner would need to in relation to civil monetary penalties), said Piccolo.
Following consultation with relevant industry groups, the Minister will have the ability to prescribe mandatory codes of conduct under the Fair Trading Act which could include a statutory duty of good faith as well as other standards of conduct in franchising as well as other sectors such as farming and retail leasing.
The Bill is very fair as it expects all parties to a business to business transaction to act in good faith and not just franchisors, said Piccolo.
The Bill and subsequent codes will go some way towards correcting the current huge power imbalance between a franchisor and franchisee.
The controversial Bill had been opposed by the Franchise Council of Australia and the Liberal Party. It was passed with a minor amendment moved by the Family First Party.
The FCA had voiced concerns about the Bill leading to state-based franchising regulation.
Steve Wright, executive director of the FCA said ñThe good news is that after intense debate, the Government agreed to an amendment which means it cannot change the rules of franchising in SA without carrying out a 60-day mandatory consultation period with relevant stakeholders (which would include the FCA). Failure to do so can trigger a ‘disallowance motion’ on the proposed changes.
This important amendment means the franchising community can continue to operate on the same rules in SA as it currently does nationwide.