Higher thresh­old needed in fair trad­ing law

New Zealand Truck & Driver - - Front Page -

A CON­TRACT THRESH­OLD OF $500,000 SHOULD BE in­cluded in the Fair-Trad­ing Act Amend­ment Bill, Road Trans­port Fo­rum chief ex­ec­u­tive Nick Leggett has told Par­lia­ment’s Eco­nomic De­vel­op­ment, Sci­ence and In­no­va­tion Se­lect Com­mit­tee.

Leggett says that the RTF sup­ports the over­all in­tent of the Bill – “that is, to ex­tend the cur­rent pro­tec­tions un­der the Act against un­fair con­tract terms (UCT) to small trade con­tracts.

“A sig­nif­i­cant chunk of the road freight trans­port in­dus­try is small and medi­um­sized busi­ness op­er­a­tors. How­ever, de­spite be­ing small busi­nesses them­selves, they take on large con­tracts.

“This is why we are sub­mit­ting that the def­i­ni­tion of small trade con­tracts in the Bill should be in­creased to a thresh­old of $500,000.

“Too many con­tracts whose par­ties de­serve pro­tec­tion from un­fair con­tract terms will be worth more than $250,000. Many trans­port op­er­a­tors will have con­tracts with an an­nual thresh­old value well in ex­cess of that amount.

“Un­less the thresh­old is in­creased, a sig­nif­i­cant num­ber of small busi­nesses that de­serve pro­tec­tion un­der the Act will not get it.”

RTF also sub­mit­ted that the Com­merce Com­mis­sion’s mo­nop­oly on en­force­ment of un­fair con­tract terms (UCT) should be re­moved; the amend­ment should ap­ply to all ex­ist­ing stan­dard form small trade con­tracts, not just when they are var­ied; and ex­tend­ing the UCT pro­vi­sions to small busi­nesses is more im­por­tant than the pro­hi­bi­tion on un­con­scionable con­duct.

Says Leggett: “Pro­hibit­ing un­con­scionable con­duct is un­likely to be ef­fec­tive.We pre­fer the fo­cus on pro­tec­tions against un­fair con­tract terms to small trade con­tracts.

“This will have a pro­found im­pact on small trans­port com­pa­nies that in some parts of the coun­try are sub­ject to un­fair con­tract terms in the form of uni­lat­eral de­ferred pay­ments (UDP).

“This is an in­sid­i­ous prac­tice used by some large cor­po­rates seek­ing to ex­tend pay­ment times to their sup­pli­ers, be­yond what is nor­mally con­sid­ered ac­cept­able.

“Road freight is crit­i­cal to New Zealand’s econ­omy and will have a sub­stan­tial role to play in COVID-19 re­cov­ery to en­sure that sup­ply chains re­main con­nected. Sup­port for road freight trans­port must be pri­ori­tised at this crit­i­cal pe­riod.”


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