Push to outlaw unfair contracts runs into 2020 as consultations kick off

The Morrison government will consider outlawing unfair contract terms (UCT) in 2020 as Assistant Treasurer Michael Sukkar seeks additional feedback on the long-awaited crackdown.

Sukkar and Minister for Employment, Skills, Small and Family Business Michaelia Cash pushed a press release last Friday afternoon announcing a public consultation on whether to “further enhance UCT protections”.

It comes over eight months after then assistant treasurer Stuart Robert first announced a regulatory impact process to consider “stakeholder views” on whether UCT’s should be made illegal.

The consultations, now live on Treasury’s website, will run until March 2020, about a year after the government’s initial public announcement that a consultation process would take place.

In a statement circulated last Friday, Cash and Sukkar said a “need for stronger protections” had been highlighted but stopped short of advocating in favour of outlawing UCTs for small businesses.

“The consultation also seeks views on whether any enhanced protections for small business contracts should also be extended to consumer and insurance contracts, to ensure consistency in the operation of the protections,” Sukkar said.

A broad grouping of organisations has already backed outlawing UCTs, including the ACCC, which has recommended the government move ahead with making them illegal several times.

Under current laws introduced in 2016, unfair contract terms aren’t illegal, meaning the ACCC can ask the court to void offending standard form contracts, but cannot pursue civil penalties.

The situation has resulted in big businesses such as UberEats, Visy Paper and JJ Richards getting off without financial penalties after being found to have pushed unfair contracts on their small business suppliers.

UberEats was pulled up after it emerged its contracts left small business owners holding the bag for refunds they did not necessarily have any control over.

The ACCC has previously suggested current laws leave the door open for big firms to use the regulator and the court system as a legal compliance tool to determine whether their contracts are unfair.

Sukkar said earlier this year the regulatory impact process was required because the reforms have the potential to have an impact on businesses. 

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