THE Turnbull Government last week released its response to the Harper Competition Policy Review in which it accepted the recommendation to increase maximum penalties for illegal secondary boycotts from $750,000 to $10 million.

“The Review Panel noted that a corporation that contravenes the secondary boycott provisions is liable to a civil penalty not exceeding $750,000, which can be compared with much higher penalties for contravention of other competition law provisions ($10 million),” said the federal government’s response to the Harper Review.

“The government agrees that there is no good reason for the penalties to vary so widely and will draft legislation to increase the maximum penalty for secondary boycotts to the same level as that applying to other breaches of the competition law.”

AMMA welcomed this announcement and was in fact the only submitting party to the Harper Review which urged a close examination of secondary boycott penalties to better deter unlawful union conduct. The new proposed penalties, if implemented, would equalise the penalties for secondary boycotts with other breaches of competition law, such as illegal collusion between businesses or market manipulation.

“Australian law has long recognised that secondary boycotts are highly illegal tactics, used by unions during some industrial disputes to apply leverage on third-party employers that are not party to the negotiations nor the primary intended target,” says AMMA executive director, policy and public affairs, Scott Barklamb.

“Unless they are effectively prohibited from doing so, some unions will attempt to win their battles by cutting employers’ supply lines, or targeting their clients or suppliers, to make it impossible for them to do business.

“Our laws need to properly protect businesses not party to industrial disputes, their employees and the community. We cannot allow them to be treated as acceptable collateral damage simply because a union is in dispute with another employer.

“An increase in penalties available to our courts court to $10 million better reflects the quantum of potential harm suffered by a target of secondary boycott action, and ensures the potential ramifications are effective in discouraging unlawful conduct.  It also makes it impossible for a well-resourced union to run a strategy that includes paying fines and ignoring the courts, which we have seen in recent times in some industries.”

AMMA’s submission to the Competitive Policy Review can be read here.