What is an Industry Code of Practice in Australia?

Industry codes or guidelines may apply to Australian businesses operating within certain industries. If you are a business owner, industry codes of conduct are intended to protect dealings between you and your customers. Whether or not a code is enforceable depends on whether it is voluntary or mandatory. A voluntary code is self-regulated, while a mandatory code is an enforceable compulsory standard that protects consumers who purchase from your business.

Industries Subject to an Industry Code of Practice

Many industries have specific codes of practice that apply to particular stakeholders and operators. Industry codes of practice apply to the following industries:

For example, there is a code for accommodation and food services in Australia. It applies to hotels, serviced apartments and other short-term accommodation. It also applies to cafes, restaurants, pubs/bars, and other food businesses. The code for this industry is the mandatory Food Standards Code, and is enforced by State agencies. It sets out the requirements for good safety, covering issues such as:

• Labelling and information requirements;
• Substances in food (or added to food);
• Contaminants and residues;
• Types of food that require pre-market clearance; and
• Processing requirements for meat in Australia.

Purpose of an Industry Code of Practice

Industry codes are enforced to protect consumers such as taking into account scenarios that might affect food safety or misleading conduct.

For example, recently the Food Standards Code adopted a standard relating to claims made about nutrition and health. The standard limits claims about infant formula products or alcohol volume. Further, the standard prevents claims on food products that refer to prevention, diagnosis of a disease or other disorder. Nutrition claims also cannot imply ‘slimming effects’. Therefore, the Code protects consumers who may be misled by labels.

Enforcement of Codes

If the industry code relating to your business requires you to keep certain information or documents, then the Australian Competition and Consumer Commission (ACCC) can request that information or documentation, and you will need to supply it within the specified time period.

The ACCC can choose businesses at random for a check, or it can target a business that may have previously had complaints or a record of non-compliance with a code.

Some examples of documentation you would need to provide are:

• Terms of trade;
• Produce or other relevant agreements;
• Written evidence of agreed prices with suppliers; or
• Agent records.

After you provide the documentation, the ACCC will review and communicate the outcome of the check with you. If there are any issues, you can seek to resolve them with the ACCC otherwise actions to enforce compliance may occur.

Protecting Your Business

Be proactive. Don’t just follow basic requirements of the mandatory codes as you may miss an important change to the codes that apply to you. You can:

• Use the code as a guideline for dealing properly with customers and ensure customers know how you will be dealing with them;
• Establish your own Code of Practice, which sets you apart from competition and allows you to work with a particular policy, which streamlines procedures and customer service;
• Keep on top of updates with the Codes of Practice, as you may have your say with industry representatives and the community;
• Stay in contact with industry associations, as they usually provide updates and opinions from key contacts in your industry.

***

If you’re unsure whether you’re complying with an industry code, or you have questions about how to best follow your industry code, call LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.