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As a business owner, if your business’ industry has an industry code of practice, it is important you know it and abide by it.
Industry codes of practice exist across many industries. It is expected that your business complies with these codes and guidelines.
Read on to learn more, as we cover some of the larger industry codes of practice.
What Is An Industry Code Of Practice?
An industry code of practice (AKA industry code or guideline) sets out ways in which you are expected to run your business.
The purpose of an industry code or guideline is to protect dealings between you and your customers or clients. For example, industry codes aim to protect consumers from misleading conduct or unsafe practices by clearly detailing what businesses can and can’t do when carrying out their activities.
Industry codes are formulated by key stakeholders such as government bodies, industry groups and the public. Industry codes have been formulated through the guidance and opinion of the industry itself to determine what truly is considered the best code of practice for that particular industry.
Are Industry Codes Enforced?
Some industry codes are mandatory whilst others are voluntary.
If an industry code is mandatory, this means that every business within that industry must comply with that code. In the instance that a business does not comply with a mandatory industry code, regulatory enforcement will follow.
A few examples of mandatory codes include the:
- Franchising Code
- Banking Code
- This is regulated by the Australian Banking Association.
- Unit Pricing Code
- Horticulture code
- Oil Code
- Electricity Retail Code
- Dairy Code
- Wheat Port Code and;
- Telecommunications Consumer Protection Code
- This is regulated by the Australian Communications and Media Authority.
In accordance with the Competition and Consumer Act 2010 (Cth), the ACCC is the regulator and enforcer of majority of the mandatory industry codes. The ACCC’s role is to enforce mandatory industry codes and ensure their purpose is being upheld.
Per the Competition and Consumer Act 2010 (Cth), the ACCC has authority to issue infringement notices to businesses who do not comply with mandatory industry codes. A business can be fined up to $10,500 for breaching an industry code.
Other industries have voluntary industry codes. Examples of Industries that have voluntary codes include the:
- Food and Grocery Code
- Aged Care Voluntary Industry Code.
These codes are flexible, allowing businesses that wish to be a part of the code to sign up. Only businesses that have voluntarily signed up to the code will be bound by it.
Examples Of Industry Codes
Let’s break down some popular industry codes of practice and consider what they may mean for you and your business.
Industry: Franchising
Key Elements:
- The current version of the code was introduced on 1 July 2021.
- Franchisors must give information to prospective franchisees before entering into an agreement.
- Franchisors must disclose capital expenditure to franchisees in a disclosure document.
This Code is mandatory.
As such, if your business is associated with a franchise, this code will apply to you.
Industry: Food and Grocery
Key Elements:
- If you are a supplier or wholesaler to a retailer who is a signatory to the Code, the Code will automatically apply to you.
- The purpose of the Code is to ensure the health and safety of consumers who will consume the goods.
- Companies that are currently signatories to the Code include: Aldi, Coles, Woolworths and Metcash Food & Grocery.
This Code is voluntary.
The Code only applies to suppliers, retailers and wholesalers who have signed up to it.
Industry: Unit Pricing
Key Elements:
- This Code applies to grocery retailers with more than 1000 square metres of floor space who sell the minimum range of food-based grocery items and online retailers who sell the minimum range of food-based grocery items.
- For the Code to apply to you, you must sell items from all of the following categories:
- bread
- breakfast cereal
- butter
- eggs
- flour
- fresh fruit and vegetables
- fresh milk
- meat
- rice
- sugar
- packaged food, other than food mentioned above.
- The Codes purpose is to allow consumers to quickly compare products of different sizes and brands in order to work out which one offers the best value.
- Subjects of this code must display a unit price that is: prominent, legible, unambiguous and in close proximity to the selling price for the grocery item.
- Unit prices should use following forms of measurement:
- If sold by volume – per 100 millilitres
- If sold by weight – per 100 grams
- If sold by length – per metre
- If sold by number – per item for a pack of 40 or fewer items; or per 100 items for a pack of 41 or more items.
For more information on this Code, see here.
This Code is mandatory.
As such, if your business is a grocery retailer with more than 1000 square metres of floor space who sells the minimum range of food-based grocery items or an online retailer who sells the minimum range of food-based grocery items, then this code will apply to you.
Industry: Banking
Key Elements:
- The Code seeks to ensure that banks provide consumers with trust and confidence that positive outcomes will be achieved and consumers privacy is protected.
- The Code requires that banks act with honesty and integrity.
- Banks are required to provide high quality services and ensure responsible lending to consumers under the Code.
- Further, banks must display transparency and accountability.
For more information, see here.
Since 2018, this code has been mandatory for all banks.
Key Elements:
- If you are a farmer who grows fruit or vegetables and sells these products through an agent or merchant, then you must have a written contract known as a Horticulture Produce Agreement.
- You can not trade horticulture produce without a Horticulture Produce Agreement.
- Horticulture produce is unprocessed fruit, vegetables (including mushrooms and other edible fungi), nuts, herbs and other edible plants, but excludes nursery products.
- The Code requires that all parties act in good faith in their dealings.
- The Code does not apply to businesses or individuals who sell horticulture produce directly to consumers and not through an agent or merchant.
For more information on this code, see here.
This code is mandatory and allows the ACCC to enforce penalties and infringement notices for breaches of the Code.
Not Mentioned Above?
Above are only some examples of industry codes that may be applicable to your business. Evidently, there can be a lot of information surrounding industry codes, practices and mandatory compliances.
For further information on business industry codes or the industry code that applies to your business, check out the ACCC here.
The Takeaway…?
Understanding which industry codes apply to you and your business is imperative to ensuring you are in compliance.
As set out above, failing to comply with industry codes can be detrimental to your business and its success.
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