Australian Competition And Connection Consumer Assessment Answers

Discuss about the Australian Competition and Connection Consumer Commission.

Coles is a huge brand in Australia and the provisions of the Competition and Consumer Act, 2010, (Cth) apply on the company. To meet with the regulatory compliance of this act, Coles has opted for a few strategies. These strategies include providing better shopping experience to its customers, improving the quality by use of fresher produce and offering better value by lowering the prices of weekly shopping basket.

The Annual Report of Coles for the financial year 2015 stated its objectives as delivering a better store network; focus on freshness and creating trusted value. By supplying better quality products, Coles is working towards creating trusted value. Coles Online is a part of the company which also shares the same strategy of providing better services, by making shopping easy for its customers. This strategy has a clear and strong focus on delivering savings to its customers. Coles Express had introduced trusted Every Day Value pricing in its stores for fulfillment of this strategy (Coles, 2015).

The slogans of the company, used from time to time are aligned with the, objectives of the Act. Whether it is the slogan used in 1980s of “You'll find the best value is at Coles New World" or the one used from 1998 to 2003, which was "Serving you better”, Coles has ensured that the objectives of the Act are met. The current slogan of the company “Down Down” promotes competition (Mortimer, 2015).

The strategies of Coles seem plain advertisement criteria, but a careful observation of the wordings clarifies the objective behind these strategies. The Act, through its various provisions, provides that a business has to ensure that the produce provided to the consumers, is safe for human consumption. Further, the products which have a low shelf life have to be provided to the customers, within the shelf life of such product. The act also provides that the inertest of the consumer have to be secured. All the strategies of Coles reflect the objective of the Competition and Consumer Act, 2010. The objective of this Act is to enhance the welfare of the Australians by promoting competition, free trading and providing provisions for consumer protection (Australian Government, 2016).

The strategy of Coles is to provide fresher products to its customers. By providing fresher produce, the company sets examples to its competitors to ensure that the consumers ultimately benefit from its business. A better store network would ensure that the customers do not face any hassles in their shopping experience. One of the strategies of Coles is to provide better products at lower values. By ensuring a combination of better product with low costs, a sense of competition is attained. The other companies would also move towards providing such services. The consumer would get better products at lesser prices. This would again promote competition.

Coles had its share of problems with the Australian Competition and Consumer Commission. The Court in the case of ACCC v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405 held that the company was engaged in unconscionable conduct and levied a penalty of $10 million on it (Australian Competition and Consumer Commission, 2014). The judge held that the misconduct of Coles was deliberate, repeated and serious. Further, the judge held that the company had misused its bargaining power and the conduct of Coles was contrary to the conscience (Australian Competition Law, 2015). This created a huge problem for Coles as it failed on its strategies to promote competition.

On the basis of above case, certain recommendations have been drafted for Coles to improve the management activities of the company, in order to comply with the competition law.

The main recommendation for Coles is that, it has to ensure that the incidents mentioned in the above case are not repeated. It should conduct its business in a way which is considered as conscience. It should, at no instance, threaten to harm its suppliers who refused to comply with the Company’s demands. Coles has to promote fair trading in its business, along with promoting competition amongst the businesses.

Coles has to ensure that it does not indulge in any sort of misleading and deceptive conduct. Further, as the unconscionable and misleading conduct has been prohibited through this Act, Coles has to make sure that it does not take part in such conduct. There has already been a case against Coles in this regard, and any more cases would mean that the company fails to achieve its strategies of creating trusted value.

There is also scope of improvement in the management activities of the company to ensure compliance of competition law. The company is working towards providing fresher produce but by creating a better supply chain, the time of getting the produce from suppliers to the supermarket can be reduced. This would ensure that the consumers gets fresh produce and promotes competition.

To conclude, it is recommended to the company that they follow the provisions of the Act strictly and ensure that the instances of unconscionable conduct are not repeated.

Keeping in view the incident that occurred, the grounds for successful negligence along with the consequences to Bungee World Ltd (BW) have been enlightened here. Recommendations are also provided to resolve the potentially damaging public relations problem in the best possible way.

Negligence is the civil wrong done where a duty of care was owed by a person towards another person and the person failed to fulfill this duty, which resulted in a loss or injury to the other person. To establish that the liability arose under the tort of negligence, certain elements have to be present. These elements include a duty of care, a breach of such duty of care, a loss or injury as a result of breach of the duty, and that the loss or injury has to be relevant and not too remote.

As per the Civil Liability Act, 2002 (NSW), a person is not considered as negligent unless the risk was predictable, the risk was not at all insignificant and in similar circumstances a prudent person would have taken proper precautions. A landmark case in the duty of care is the case of Donoghue v Stevenson [1932] AC 562 (Boella and Pannett, 1999). Further, a standard of care has to be ensured as was seen in the case of Bathurst Regional Council v Thompson [2012] NSWCA 340 (Sheehan, 2012).

Though a defense is available to the breaching party which states that, a person has to ensure his own safety when the risks are presumed. In such a case, the aggrieved party cannot sue the breaching party as they failed to take the duty of care for themselves. This was also established in the case of Mulligan v Coffs Harbour City Council (2005) 223 CLR (High Court of Australia, 2005).

But, in the case of Rootes v Shelton (1967) 116 CLR 383, 385-6, the judge held that when the risk is inherent, the people are bound to accept it to engage in the risky sports (Swarb, 2016). And so, this cannot be referred as a defense by the breaching party.

Damage is not only the physical damage, but also the emotional distress. In the case of Baltic Shipping v Dillon (1993) 176 CLR 344, it was held that the applicant could recover damages for the emotional distress that resulted from the breach of duty of care (Australian Contract Law, 2013).

In the present case, BW was providing the services of Bungee Jumping for a fee of $50. Further, a waiver form had to be signed by the customers to undertake this activity. As has been established from the famous cases, this does not reduce the liability of BW in case of an injury.

BW owed a duty of care towards Loki and had to ensure that the equipment for the bungee jumping was safe and secure. Further, the risk of corrosion was inherent due to the sea moisture present in the air. In this case, BW is liable for negligence as it breached the duty of care it owed to Loki.

Further, as stated above, the injury does not have to be a physical and a mental injury is enough to claim damages under negligence. In this case, Loki did not suffer any physical injury but suffered a nervous shock. So, he can successfully sue BW for negligence.

As a result of this negligence action taken by Loki, BW will be liable to pay Loki the monetary damages, as a remedy for the injury which Loki suffered.

This is a potentially damaging public relations problem and so an effective crisis management is needed to resolve this problem. It is recommended to the Board that the problem should be assessed properly and an understanding should be gained regarding the potential stakeholder, which is Loki in this case. The Board should take steps in providing compensation to Loki before he takes any legal action. This would not only save the costs of legal proceedings, but also act as a shield against the damage done to Loki, as well as, to the image of the company.

It is also recommended to the Board to ensure that the faulty equipment is changed and that all the old equipment is checked for its durability and safety. The Board should properly advertise the remedial actions taken as well as the voluntary compensation provided to Loki, so that the image of the company, in the eyes of the public, is improved.

Lastly, it is recommended to the company formulate a proper crisis management team which can anticipate, identify and monitor such crisis which have a negated impact on the image of the company (Bernstein, 2016).

The 10 minimum employment entitlements which are provided to the workers in Australia as per the Fair Works Act, 2009, are known as the National Employment Standards, or NES. An enterprise agreement or any other registered agreement, an employment contract, or an award are not allowed to provide such conditions, which are less than the NES or the national minimum wages. It can be rightly inferred that the NES and the national minimum wage cover the minimum entitlements for the workers in this country. The 10 minimum entitlements as are stated in the NES includes requests for flexible working arrangements; annual leave; maximum weekly hours; parental leave and related entitlements; long service leave; fair work information statement; personal careers leave and compassionate leave; community service leave; public holidays; and a notice of termination and redundancy pay (Fair Work Ombudsman, 2016).

These standards apply to all such employees who are covered in the national workplace relations system by the NES, irrespective of the registered agreement, employment contract, or the award. Casual employees are also eligible to NES entitlements, when it relates to an unpaid compassionate leave, an unpaid carer’s leave, the Fair Work Information Statement, or the community service leave (Fair Work Ombudsman, 2016).

The head of human resources of an Australian engineering company needs to ensure that the company does not contravene these standards. These standards contain that the maximum standard working week should be within the limits of 38 hours for any full time employee, along with the reasonable additional hours. It has to be ensured that the right to request some flexible working arrangement is present. The parental and adoption unpaid leave of 12 months should be available for the employees along with a right to seek an additional 12 months. The paid annual leave of four weeks should be available with the employees for each year, on pro rata basis (The Australian Workers’ Union, 2016).

Further, a ten day paid personal or carer’s leave should be available with the employees for each year, on pro rata basis, along with two days unpaid carer’s leave for each permissible occasion, and two days paid compassionate leave for each permissible occasion. The head of HR also has to ensure that proper leaves for jury service, as well as, for emergencies and natural disasters are provided to its employees. Such person also has to ensure that the new employees receive the Fair Work Information Statement. The employees have to be entitled to take the public holidays and the entitlement be paid for ordinary hours for such days. Lastly, the long service leave and notice of termination as well as redundancy pay has to be made available (Fair Work Ombudsman, 2016).

The section 3 of the Australian Consumer Law (ACL) defines the term consumer. A person who acquires goods or services and the amount paid for such goods or services does not exceed $40,000, is a consumer (Australasian Legal Information Institute, 2016). Such goods and services must be used for personal only and not for re-supply, to fall under the category of consumer. Further, Section 21 of the ACL contains provisions regarding unconscionable conduct in relation to the goods or services. Section 21(1) prohibits a person from supplying or acquiring goods and services, to or from, a person in a manner where the conduct is considered as unconscionable (Australian Competition Law, 2014).

Though, the sections of ACL do not define what is considered as unconscionable conduct and hence, reliance is made to the Courts to consider whether an act can be termed as unconscionable conduct or not (Find Law Australia, 2016). The courts generally rely on the following points to consider the conduct as unconscionable conduct: the strength in the bargaining capabilities of the consumer and the supplier; if the consumer was required to comply with the conditions of the supplier, which were not reasonable in the interests of the consumer, and the supplier’s conduct had forced the consumer to comply with such conditions; whether or not the consumer had a clear understanding regarding the appropriate documents related to the supply of goods and services; whether the supplier exerted any pressure or undue influence on the consumer; and such circumstances where the consumer could have taken the goods or supplier from any other supplier.

If a supplier is found guilty of contravening the section 21 of the ACL, such supplier is then liable to civil pecuniary penalties of $220,000 for persons (other than body corporate) and for body corporate the penalty amount is $1.1 million. Further, the enforcement powers and remedies can also be applied on the supplier for contravening this section. These include injunctions, damages, substantial notices, undertakings, infringement notices, and non-punitive orders, amongst the other things (Australian Consumer Law, 2013).

As the sale of the Ono water filter amounted to $2000, Rebecca would be considered as a consumer under the ACL. Dave had used undue influence on Rebecca and forced her to purchase the filter. Further, he used his strength of bargaining position and forced Rebecca to waive the cooling off period. Rebecca had no need to purchase the filter but the unconscionable conduct of Dave compelled her to buy the filter. Hence, Dave contravened the sections of ACL and as a result, Rebecca has the right to seek compensation from Dave. Further, Dave is also liable to civil pecuniary penalties of $220,000.

References

Australasian Legal Information Institute. (2016) Competition And Consumer Act 2010 - Schedule 2. [Online] Australasian Legal Information Institute. Available from: https://www.austlii.edu.au/au/legis/cth/consol_act/caca2010265/sch2.html [Accessed on: 20/09/16]

Australian Competition and Consumer Commission. (2014) Court finds Coles engaged in unconscionable conduct and orders Coles pay $10 million penalties. [Online] Australian Competition and Consumer Commission. Available from: https://www.accc.gov.au/media-release/court-finds-coles-engaged-in-unconscionable-conduct-and-orders-coles-pay-10-million-penalties [Accessed on: 20/09/16]

Australian Competition Law. (2014) Section 21: Unconscionable conduct in connection with goods or services. [Online] Australian Competition Law. Available from: https://www.australiancompetitionlaw.org/legislation/provisions/acl21.html [Accessed on: 20/09/16]

Australian Competition Law. (2015) ACCC v Coles Supermarkets Australia Pty Ltd ACCC v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405 (22 December 2014). [Online] Australian Competition Law. Available from: https://www.australiancompetitionlaw.org/cases/2014coles.html [Accessed on: 20/09/16]

Australian Consumer Law. (2013) The Australian Consumer Law: A framework overview. [Online] Australian Government. Available from: https://consumerlaw.gov.au/files/2015/06/ACL_framework_overview.pdf [Accessed on: 20/09/16]

Australian Contract Law. (2013) Baltic Shipping v Dillon High Court of Australia (1993) 176 CLR 344. [Online] Australian Contract Law. Available from: https://www.australiancontractlaw.com/cases/baltic.html [Accessed on: 20/09/16]

Australian Government. (2016) Competition and Consumer Act 2010. [Online] Australian Government. Available from: https://www.legislation.gov.au/Details/C2011C00003/Html/Volume_1#param2 [Accessed on: 20/09/16]

Bernstein, J. (2016) The 10 Steps of Crisis Communications. [Online] Bernstein Crisis Management. Available from: https://www.bernsteincrisismanagement.com/the-10-steps-of-crisis-communications/ [Accessed on: 20/09/16]

Boella, M., and Pannett, A. (1999) Principles of Hospitality Law. 2nd ed. UK: Thomson Learning, pp 16-17.

Coles. (2015) Annual Report 2015. [Online] Coles. https://www.coles.com.au/~/media/files/coles/pdfs/industry%20reports/467372_coles_annual_report_2015_18.pdf [Accessed on: 20/09/16]

Fair Work Ombudsman. (2016) Fair Work Information Statement. [Online] Australian Government. Available from: https://www.fairwork.gov.au/ArticleDocuments/724/Fair-Work-Information-Statement.pdf.aspx [Accessed on: 20/09/16]

Fair Work Ombudsman. (2016) National Employment Standards. [Online] Australian Government. Available from: https://www.fairwork.gov.au/employee-entitlements/national-employment-standards [Accessed on: 20/09/16]

Find Law Australia. (2016) Consumer law: What is unconscionable conduct?. [Online] Find Law Australia. Available from: https://www.findlaw.com.au/articles/4474/consumer-law-what-is-unconscionable-conduct-.aspx [Accessed on: 20/09/16]

High Court of Australia. (2005) Mulligan v Coffs Harbour City Council [2005] HCA 63. [Online] High Court of Australia. Available from: https://eresources.hcourt.gov.au/downloadPdf/2005/HCA/63 [Accessed on: 20/09/16]

Mortimer, G. (2015) Down, down but not different: Australia’s supermarkets in a race to the bottom. [Online] Queensland University of Technology. Available from: https://eprints.qut.edu.au/92666/2/92666.pdf [Accessed on: 20/09/16]

Sheehan, E. (2012) Council fails in reliance on s 42 defence – accident on steps of rotunda in park - Bathurst Regional Council as Trustee for the Bathurst City Council Crown Reserves Reserve Trust v Thompson [2012] NSWCA 340. [Online] Curwoods Lawyers Case Notes. Available from: https://casenotes.curwoods.com.au/?p=2002 [Accessed on: 20/09/16]

Swarb. (2016) Rootes V Shelton; 1965. [Online] Swarb. Available from: https://swarb.co.uk/rootes-v-shelton-1965/ [Accessed on: 20/09/16]

The Australian Workers’ Union. (2016) National Employment Standards. [Online] The Australian Workers’ Union. Available from: https://www.awu.net.au/national-employment-standards [Accessed on: 20/09/16].