The ACCC turns its spotlight on Toll

The chairman of the Australian Competition and Consumer Commission Rod Sims has contacted me to announce that the ACCC is conducting an investigation into Toll's arrangement with the Transport Workers Union.

This is great news for Australia and represents one of the first times the ACCC has investigated deals between large companies and trade unions -- not an easy task because normal industrial relations agreements are excluded from the ACCC's remit.

Sims said that the decision to investigate the arrangement between Toll and the TWU had been made prior to the decision to allow the TWU to represent some 75 Queensland owner-drivers in their Toll negotiations. Accordingly, my commentary that the ACCC was rubber-stamping the TWU-Toll arrangement was wrong (Toll's ACCC victory sets a dangerous precedent, October 17).

I fully accept Sims' assurance that he was investigating prior to my commentary even though it was not disclosed, but I am delighted to admit error -- I aimed to achieve an ACCC investigation. 

The combination of coverage in Business Spectator and The Australian has brought the affair out into the open. My first commentary was back in July (Appeasing unions is taking its Toll, July 16).

That commentary was made possible by the work of The Australian's Grace Collier, who undertook research that uncovered the incredible deal (Little people are the victims of union-business harassment, July 16).

For those who have not been following the affair, let us summarise what the ACCC will be investigating.

Toll has been paying some $150,000 a year into a union-owned company. A portion of the money (about $25,000) is dependent on the TWU taking action against Toll competitors.

In 2011, 2012 and 2013, the agreement required the union to attack one Toll competitor each year. It appears the union and Toll would each year agree on the target and the union was required to conduct audits, wage inspections or other ‘compliance' investigations.

The union was also required to report to Toll what it discovered and ‘prosecute' the Toll competitor if any breaches were discovered. The union used its special rights of entry under the Fair Work Act.

Last year the agreement was extended so the union was required to attack five agreed Toll competitors each year in 2013, 2014, 2015, 2016 and 2017. Again, the union was to report all results to Toll.

The source of this information is none other than evidence given to the Trade Union Royal Commission under oath by Damian James Sloan, Toll's senior legal counsel, workplace relations and safety.

To come under the trade practices' ambit, the Toll arrangement with the TWU has to be shown to either be aimed at substantially lessening competition or having the effect of substantially lessening competition.

The investigation will take a few months and the ACCC must decide whether or not that the Toll-TWU agreement substantially lessens competition as defined in the Act.

If the ACCC believes there is a breach, then the matter goes to the Federal Court. Without in any way prejudging the outcome, Sims has promised me that in the event that the arrangement was held not to substantially lessen competition as defined in the Act, then the full reasons for the decision will be published.

Toll will vigorously defend its position. It has said that the agreement involved safety issues. In addition it is not known how many of Toll's competitors were actually investigated by the TWU before the Royal Commission started and whether the agreement continued to be implemented after the Royal Commission.

But it's a bizarre arrangement that threatened Australian productivity.