Industry Codes Of Practice: What They Are And How They Work In Australia

When you’re busy running a small business, it can feel like there are so many rules coming at you from every direction - legislation, regulators, suppliers, customers, and sometimes even your competitors.

That’s where industry rules and standards often step in. A common question we hear is: what is an industry code of practice, and do you actually need to follow one?

In Australia, an industry code of practice can be a really practical tool. It can set out expectations for how businesses in your sector should behave, how disputes should be handled, and what “good practice” looks like. In some cases, the code is voluntary. In other cases, it’s mandatory and enforced by law.

Below, we’ll walk you through what industry codes of practice are, how they work in Australia, and how you can build a simple compliance approach that makes sense for a growing small business.

What Is An Industry Code Of Practice?

In plain terms, an industry code of practice is a set of standards or rules developed for a particular industry. It usually explains:

• how businesses should treat customers, suppliers, franchisees, or other market participants
• what information needs to be disclosed (and when)
• how complaints or disputes should be managed
• what “fair dealing” or “ethical conduct” looks like in that sector
• how compliance is monitored and what happens if you don’t comply

Industry codes can be created by industry bodies (like associations) or set out in law through regulations. They’re often written to lift standards across the industry, improve customer trust, and reduce disputes.

Codes Of Practice vs Laws: What’s The Difference?

A code of practice is not always the same thing as a law.

• Laws (like Commonwealth or State legislation) are legally enforceable across their scope.
• Codes of practice can be voluntary, but they can also be made mandatory through legislation or regulations.

Even when a code is “voluntary”, it can still have real consequences. For example, if your business publicly commits to following a code, your customers may rely on that promise - and that can create risk if your actual practices don’t match.

Why Do These Codes Exist In The First Place?

Industry codes usually exist because there’s been a recognised need for clearer expectations in a sector. That might be due to:

• power imbalances (for example, where small businesses rely on much larger suppliers or platforms)
• recurring disputes and unclear contract terms
• high consumer harm risks (for example, health, safety, or financial impacts)
• rapidly changing business models where legislation is slow to catch up

In other words: codes often appear where “business as usual” has historically led to problems - and the industry (or government) wants more consistency.

Why Industry Codes Of Practice Matter For Small Businesses

It’s easy to think of a code of practice as just another compliance document to file away. But in reality, industry codes of practice can affect how you sell, advertise, contract, resolve disputes, and manage relationships.

Here are the main reasons they matter for small business owners.

They Can Set The “Minimum Standard” Your Customers Expect

Even if a code isn’t technically law, it can influence what customers, clients, and regulators see as reasonable conduct.

For example, if a code says you should provide clear disclosures, respond to complaints within a set timeframe, or avoid certain sales tactics, failing to meet those standards can damage trust - and potentially increase dispute risk.

It also overlaps with broader obligations under the Australian Consumer Law (ACL), including the general prohibition on misleading or deceptive conduct. Many small businesses find it helpful to understand how ACL concepts apply in practice, including Section 18.

They Can Reduce Legal And Commercial Risk

Following a code can create a clearer “playbook” for your team. That can help prevent:

• miscommunication with customers or suppliers
• inconsistent handling of refunds, cancellations, or complaints
• poor record keeping (which becomes a big issue when there’s a dispute)
• contracts being used incorrectly or inconsistently

Often, your compliance with a code is supported by having the right contracts and policies in place. For example, online businesses can reduce ambiguity by having tailored Website Terms and Conditions that reflect how the business actually operates.

They Can Be A Condition Of Doing Business

Sometimes, you’ll find codes of practice indirectly “mandatory” because they’re built into commercial requirements. For example:

• a marketplace, platform, franchisor, or head contractor may require compliance as part of onboarding
• an insurer may expect certain industry-standard practices
• a government tender may assess whether your business follows recognised industry standards

So even if the code itself isn’t legislation, it can still affect your ability to win work and keep relationships.

Are Industry Codes Of Practice Mandatory In Australia?

This is the key compliance question: are you legally required to follow an industry code?

In Australia, industry codes generally fall into two categories:

• Mandatory (prescribed) codes: these are enforced under Australian law (often under Commonwealth legislation and regulations). If your business falls within scope, you must comply.
• Voluntary codes: these are often adopted by industry bodies and participating businesses. They aren’t automatically enforceable like legislation, but they still matter (especially if you claim to follow them).

Mandatory Codes: What Small Businesses Should Watch For

Mandatory industry codes are usually designed to regulate how businesses deal with other businesses (for example, suppliers, contractors, franchisees) or to prevent unfair practices in markets.

If a mandatory code applies to you, it’s not just “best practice” - it’s a legal compliance issue. Depending on the code, consequences may include:

• regulatory action
• civil penalties
• compensation claims
• contract disputes escalating faster (because the code sets clear rules)

Examples of mandatory (prescribed) industry codes in Australia include the Franchising Code of Conduct and the Horticulture Code of Conduct. If you operate in a sector where codes are common (such as franchising, agriculture supply chains, or platform-style business models), it’s worth getting advice early before you scale.

Voluntary Codes: Still Not Something To Ignore

Voluntary codes are often treated as “soft law” - not always legally binding by themselves, but still influential.

They can become relevant where:

• you promise compliance in marketing materials or proposals
• your customer contract says you comply (or incorporates the code by reference)
• your supplier agreement requires compliance
• a dispute arises and the code is used as evidence of what’s reasonable

That’s why it’s important to be careful with how you describe your commitments publicly. If you say you comply, you need to make sure your internal practices match.

How Do I Know Which Industry Code Of Practice Applies To My Business?

If you’re asking what industry codes of practice are and which ones apply to you, you’re not alone. Many business owners only discover a code when something goes wrong - like a dispute, customer complaint, or supply chain issue.

Here’s a practical way to identify what’s relevant.

Step 1: Start With Your Business Model (Not Your Industry Label)

Industry labels can be misleading. A “tech business” could be a software developer, a marketplace, a subscription platform, or a service agency - and the rules that apply can differ.

Instead, map out what you actually do:

• Do you sell to consumers, other businesses, or both?
• Do you take payments online?
• Do you operate on subscription or automatic renewal?
• Do you have resellers, distributors, franchisees, or agents?
• Do you provide regulated services (like health, financial, or building services)?

This model-first approach makes it easier to spot where codes or standards are likely to apply.

Step 2: Check Your Contracts And Onboarding Documents

Codes are often “hiding in plain sight” inside your paperwork. Common places to check include:

• supplier agreements and head contractor agreements
• platform terms (if you sell through a marketplace)
• customer terms and policies
• industry association membership documents
• tender requirements

This is also where having clear, tailored commercial documents matters. For B2B businesses, your Terms of Trade can be a practical place to set expectations around pricing, payment, delivery, risk allocation, and dispute processes - all areas that codes frequently address.

Step 3: Look At Your Regulator Landscape

Depending on your sector, you may deal with one or more regulators. Some codes are connected to a specific regulator’s enforcement framework.

If you’re unsure, it’s worth asking:

• Which government bodies regulate (or influence) my industry?
• Are there published standards or codes of conduct in my sector?
• Do my competitors refer to a code in their contracts or websites?

Step 4: Get Advice If The Code Is High-Stakes

Not every code needs a complex project plan. But if the code affects how you contract with customers, manage disputes, or disclose information, it’s worth getting legal help to interpret the scope properly and implement it realistically.

This is especially true if you’re growing quickly, bringing on partners, or entering long-term agreements where a compliance slip could be expensive.

How Do I Comply With An Industry Code Of Practice? (A Practical Implementation Checklist)

Once you’ve identified an industry code of practice that applies (or that you want to adopt voluntarily), the next step is making compliance manageable.

In our experience, small businesses do best when compliance is:

• built into daily operations (not just a document in a folder)
• owned by someone internally
• supported by the right contracts and policies

Here’s a practical checklist.

1. Translate The Code Into “Business Rules” Your Team Can Follow

Codes can be written in a formal way. Your team needs something simpler.

Try rewriting the key obligations into short internal rules, like:

• “We respond to written complaints within X business days.”
• “We give customers a clear written quote before starting work.”
• “We don’t make performance claims unless we can prove them.”
• “We keep records of approvals, variations, and key communications.”

If you have staff, it’s also important to align these internal rules with your employment documentation and training approach. A well-drafted Employment Contract can help reinforce expectations, responsibilities, and processes from day one.

2. Update Your Customer-Facing Terms, Policies And Templates

Many industry codes of practice tie directly into what you tell customers (or other businesses) at the start of the relationship.

This can include:

• pricing and quote disclosures
• cancellation and refund processes
• complaints handling pathways
• service inclusions and exclusions
• timeframes and delivery expectations

If you operate online, your customer experience often starts with your website and checkout. That’s why your Website Terms and Conditions should match your actual workflows, and shouldn’t be treated as generic boilerplate.

3. Build A Simple Complaints And Disputes Process

A common feature of industry codes is a requirement to handle complaints fairly and consistently.

For a small business, “fair and consistent” usually means:

• you have one clear intake method (email form, support inbox, CRM ticket)
• you acknowledge complaints quickly
• you keep clear internal notes and documents
• you have escalation steps if the first response doesn’t resolve it

Even if the code doesn’t mandate timeframes, having internal time targets keeps things from dragging out - and prevents issues from becoming reputational problems.

4. Check Your Advertising And Sales Scripts

Codes often overlap with advertising and sales conduct, particularly around transparency and fair dealing.

This is where small businesses can accidentally get into trouble, especially when:

• your team uses “standard” sales promises that aren’t always true
• your ads imply outcomes you can’t guarantee
• your website copy is written quickly without legal review

It’s worth sense-checking your marketing against the ACL (including misleading or deceptive conduct rules) and whatever code applies in your sector.

5. Protect Confidential Information When Working With Industry Bodies Or Partners

Sometimes, compliance involves engaging with industry associations, dispute resolution schemes, auditors, or supply chain partners.

When you’re sharing sensitive commercial information (like pricing, customer lists, processes, or product roadmaps), it’s worth using a Non-Disclosure Agreement where appropriate.

This isn’t about being distrustful - it’s about being clear. Most business relationships work better when everyone knows what’s confidential and how it can be used.

6. Keep Evidence: “If It Isn’t Documented, It Didn’t Happen”

Many code obligations are hard to prove without records.

So, think about simple evidence habits, like:

• saving customer approvals and variations in writing
• keeping copies of advertisements and promotions
• tracking complaint outcomes
• maintaining a “code compliance” checklist for recurring jobs

This doesn’t need to be complicated. A shared folder structure and a basic CRM workflow can be enough for many small businesses - as long as it’s consistent.

7. Review Your Privacy Practices If The Code Touches Customer Data

Some industries are particularly sensitive around personal information (for example, where you collect health details, location data, or identity documents).

If your business collects personal information, you may need a Privacy Policy (for example, if you’re covered by the Privacy Act 1988 (Cth), or if a platform/client contract requires one). Even where the Privacy Act thresholds don’t clearly apply, privacy best practice is increasingly becoming the “baseline” customers expect - and codes sometimes reflect that reality.

Key Takeaways

• What is an industry code of practice? It’s a set of standards for how businesses in a particular sector should operate, especially around fairness, disclosure, and dispute handling.
• Industry codes of practice can be mandatory (legally enforceable) or voluntary (still important if you commit to them or they influence expectations).
• To work out what applies to you, start with your business model, then check your contracts, onboarding documents, and regulator landscape.
• Compliance is easier when you translate code obligations into simple internal rules, supported by clear customer terms and complaint processes.
• Strong documentation (terms, policies, records, and training) reduces risk and helps your business stay consistent as you grow.

If you’d like help identifying which industry code of practice applies to your business or updating your contracts and policies to match, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.