Baking industry participants are now subject to different competition and consumer laws. The laws, the second tranche in an overhaul of consumer affairs regulations in Australia, commenced on 1 January, 2011.

The new law, the Competition and Consumer Act 2010 is the new name for the Trade Practices Act 1974. The new laws have several aspects that have an impact on the baking industry.

In summary, the Australian Consumer Law (ACL):

• gives consumers the same rights and protections wherever they are in Australia;

• simplifies the law and reduces business compliance burdens by replacing provisions set out in 17 existing national, state and territory laws with a single national consumer law; and

• creates a national enforcement regime, with consistent enforcement powers for Australia’s consumer protection agencies.

The ACL will replace different national, state and territory laws that set out consumer rights and business obligations when selling goods and services with a single, national set of rules.

The ACL is a national consumer law, which is to apply to all business sectors. It covers general standards of business conduct, prohibits harmful practices, regulates specific types of business-to-consumer transactions, provides basic consumer rights for goods and services and regulates the safety of consumer products and product-related services.

The ACL will cover:

1. General law: including misleading or deceptive conduct, unconscionable conduct, false or misleading representations and related offences, information standards and country of origin representations.

2. Consumer guarantees: including what consumer guarantees apply to goods and services, who is responsible for these guarantees and when remedies, such as refund repair and replacement are available.

3. Product safety: including the new national product safety regime.

4. Sales practices: including unsolicited supplies, unsolicited consumer agreements, pyramid schemes, multiple pricing, lay-by agreements, referral selling and harassment and coercion.

5. Unfair contract terms: including the new national unfair contract terms law, which took effect on 1 July, 2010.

Application to the baking industry

Here are some illustrations of the potential applications of the new ACL to the baking industry:

Product safety

The product safety provisions involve advising the Commonwealth if the provision of your consumer goods results in the death, serious injury or illness. This must be done within two days of becoming aware of the incident. So, if a consumer becomes ill from eating your product you must advise the Commonwealth. This applies even if the consumer goods were misused. For consumer goods, a bakery must identify the goods and include all they know about:

• when, and in what quantities the goods were manufactured or supplied in, imported to, or exported from Australia;

• the circumstances of the death, serious injury or illness;• the nature of the serious injury or illness; and

• any action the supplier has taken, or intends to take, in relation to the goods.

Misleading conduct

Another example is misleading and deceptive conduct. Businesses that use ‘puffery’ (wildly exaggerated, fanciful or vague claims that no reasonable person could possibly treat seriously or find misleading) may be caught because there is no legal distinction between puffery and misleading or deceptive conduct. An example is a café owner claims to make ‘the best coffee in the world’.

Employment

For the first time, statutory provisions have been made regarding conduct in employment. It will be unlawful to make false or misleading representations about the:

• availability, nature or terms and conditions of employment; or

• profitability, risk or other material aspect of any business activity that requires work or investment by a person.

An example would be where an offer of employment is made and a bonus or other incentive is offered but not paid when the conditions are met for the payment. Offering someone a promotion, or a management position and not following through may also be misleading conduct, in that an employee has relied on that representation to leave a position.

A further example is a baker selling his bakery. When asked the reason for sale, he does not mention that he is selling because a similar bakery is opening nearby.

Penalties for making false or misleading representations is an offence. The maximum criminal penalties are $220,000 for an individual and $1.1 million for a body corporate. Civil penalties for the same amount apply. Other civil remedies include:

• injunctions;• damages;

• compensation;

• orders for non-party consumers;

• corrective advertising orders;

• adverse publicity orders; and

• disqualification order

Consumer protection agencies can accept court-enforceable undertakings, issue infringement notices, substantiation notices and public warning notices.

We urge all participants to review their business practices to ensure that they are in line with intended objects of the Competition and Consumer Act 2010.

Anton duc is workplace relations manager for the baking industry association (nsw employers) and industrial relations advisor for the baking industry association of victoria. anton advises the baa on award modernisation and is also a practicing solicitor with a sydney law firm.