Industry codes of practice are enforceable rules and measures that regulate industry conduct, its workers, and their relationship with consumers. Above all, they ensure good industry practice by setting guidelines for fair dealing between you and your customers.
Therefore, you can choose to establish your own Code of Practice, or adopt an industry specific Code of Practice. Check out our previous guide for more information about whether a Code of Practice is mandatory or voluntary in relation to your business or industry.
Article Summary
In this article, we cover 3 common industry Codes of Practice within Australia:
- Banking Code of Practice: developed by the Australian Banker’s Association (ABA). Governs banks and their dealings with individual or small business customers, including prospective customers and their guarantors
- The Telecommunications Consumer Protections Code: sets out the rules Australian telecommunication providers must abide by when dealing with customers
- Franchising Code of Conduct: a mandatory industry code that applies to franchisors, franchisees and prospective franchisees tied into a franchise agreement
As mentioned before, it’s worth visiting your relevant industry factsheet to discover whether the industry-wide Code of Practice is mandatory or voluntary in relation to your business.
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Examples of Industry Codes of Practice
Here are 3 examples of industry codes of practice in Australia.
1. Banking Code of Practice
The Australian Bankers’ Association (ABA) Banking Code of Practice governs banks and their dealings with individual or small business customers, including prospective customers and their guarantors. Consequently, the code sets standards for good banking practice that promotes good faith and transparency between the banks and customers. Hence, it ensures consumer protection, and regulates financial services.
The Banking Code of Practice covers four key areas:
- The bank’s key commitments and general obligations.
- Banking services practices.
- Information about banking services.
- Resolution of disputes, monitoring and sanctions.
The Banking Code of Practice gives individual and small business customers rights such as:
- Disclosure of fees and charges and other terms and conditions;
- Changes to terms and conditions and fees and charges;
- Privacy and confidentiality;
- Debt collection; etc.
When a bank adopts the Code, it will become binding between you and the bank. Although the Code is not legislation, banks that adopt it are contractually bound by their obligations. For example, if a bank breached the Code, the Code Compliance Monitoring Committee (CCMC) will investigate the alleged breach, or the customer can refer to the bank’s external dispute resolution scheme.
2. The Telecommunications Consumer Protections Code
The Telecommunications Consumer Protections (TCP) Code is one of many industry codes of practice that determines standards for telecommunications service providers in Australia. It protects mobile, landline and internet customers. In addition, the Code sets out rules telecommunications providers must adhere to in their dealings with customers. The Australian Communications and Media Authority(ACMA) and the industry compliance body – Communications Compliance – monitors compliance.
The TCP Code covers five areas:
- Advertising and point of sale;
- Billing;
- Payment methods;
- Complaint handling; and
- Customer’s change of service provider.
The TCP Code provides the following safeguards:
- Before you buy a product or service;
- Before you receive your bill;
- When you receive your bill;
- If you cannot afford to pay your bill; and
- If you have a complaint.
Additionally, the Telecommunications Industry Ombudsman (TIO) deals with consumer complaints concerning breaches of the Code.
3. Franchising Code of Conduct
The Franchising Code of Conduct is a mandatory industry code that applies to franchisors, franchisees and prospective franchisees tied to a franchise agreement. Therefore, it imposes obligations to all franchise agreements that were entered into, renewed, extended or transferred on or after 1 October 1998. If a franchise agreement was entered, renewed, transferred or varied on or after 1 January 2015, then it will be covered by the entire Code.
Moreover, the Code is regulated by the Australian Competition and Consumer Commission (ACCC) who encourages compliance with the Code. Subsequently, it investigates alleged breaches of the Franchising Code, and takes action when appropriate.
What issues are covered by the Code?
- Disclosure of information regarding the Franchisor.
- Conditions contained in the Franchise Agreement.
- Complaint handling and dispute resolution procedures.
From 1 January 2015, a new Franchising Code of Conduct was implemented. As a result, parties to a franchise agreement must comply with new requirements, and procedures should be in place to ensure your compliance with the Code. For example, franchisors must act in good faith, put marketing fund money in a separate account, etc.
It’s worth noting that the new Franchising Code of Conduct expanded its reach to five key areas:
- disclosure requirements
- a good faith obligation
- a dispute resolution mechanism
- a cooling-off period
- procedures for ending a franchise agreement
Conclusion
To sum up, each industry has its own legal and business requirements. If you would like to find out what code applies to your business, check out the Australian Government’s Industry Research. For greater legal guidance get in touch with a business lawyer to find out what industry code of practice applies to your industry and your obligations.
