Employers see fault in Fair Trading Bill

Press, 13 February 1986, Page 4

Employers see fault in Fair Trading Bill

PA Wellington Provisions covering employment should be dropped from the Fair Trading Bill, says the Employers’ Federation.

Parliament’s Commerce and Marketing Select Committee has begun hearing submissions on the bill, which was introduced in the House in November. One of the bill’s clauses forbids conduct that is “misleading or deceptive” about the availability, nature, terms or conditions of any employment offered. The federation said the clause was out of step with a bill which was aimed at the sellers of goods and services because employers were “buyers” of labour. “Employers are frequently urged to engage more extensively in staff training and retraining,” the submission said. "It would be absurd if an employee, requested to retrain, were to object to it under the Fair Trading Act claiming that he or she had been misled.” Such action could expose the employer to the risk of substantial penalties. The federation said employment was covered by other statutes, particularly the Industrial Relations Act.

However, if such services were to be part of the bill, it should require “fair trading” by also outlawing misleading representations by would-be employees about their competence or willingness to work.

The Fair Trading Bill revises trading conduct law, contains provisions covering product safety, and forbids misleading or deceptive conduct and false representation of goods and services.

The Minister of Consumer Affairs will have the power to declare goods unsafe and prohibit their supply for an initial 18 months. At the end of that period their supply could be banned again, either indefinitely or for a specified period.

The Minister will also be able to require a supplier who does not comply with product safety standards to recall or repair goods. The Chambers of Commerce said they were concerned that the legislation moved too far away from the principle of let the buyer beware. They supported consumers being entitled to the information essential to make rational choices and effective redress for complaints. Companies which set out intentionally to deprive consumers of such rights should be penalised. However, while supporting the intention to draw up a code intended to prevent misleading or deceptive conduct, the chambers said they took “strong exception” to inferences in the bill that business was irresponsible.

“We caution against any legislation that intrudes unnecessarily into commerce or seeks to protect business from fair competitive practices,” the submission said. The chambers also

criticised the vagueness of the wording of some of the bill’s clauses.

Earlier, the Finance Houses’ Association said it was concerned that certain provisions in the bill could be contravened even when there was no intention to mislead.

Those provisions should be clarified to cover calculated attempts to mislead consumers, the association said. The Consumer Council suggested that prohibition orders on unscrupulous traders who blatantly profiteered at the expense of customers should be written into law.

The policy-making body of the 140,000-member Consumers’ Institute said the idea could be seen as a repugnant interference with a citizen’s right to pursue any occupation of choice. But there was already precedent in the Credit Contracts Act which provided powers to restrict or prohibit a person from acting as a financier.

“Similarly the statutory disciplinary procedures of any professional association provide a means for cancelling a person’s membership of that profession,” the council’s submission said. .

“Most commonly these measures are taken in cases of dishonesty or gross incompetence.”

The council said that conduct warranting a prohibition order would have

to be shown to be sufficiently “grave, persistent and abusive” of consumers.

While supporting the bill’s intentions, the council noted that there were omissions in such aspects as the contracting out of Sale of Goods Act warranties.

“Some guarantees on electrical appliances and motor vehicles still set very limited terms of assured quality and restrictive repair conditions and then state those terms to be ‘in lieu of any other warranty either expressed or implied by law’.” There were also fallings too, in statutory warranties on services and the repair and provision of spare parts.

The council also called for amendments to the bill to make manufacturers and importers liable directly to consumers where goods failed to match their description or were Of unmerchantable quality. Consumer protection would also be given a boost by making sponsors and endorsers liable personally for the quality of the product or service they were paid to promote.

Obligations extended under guarantee could also be made to remain a personal obligation of the company’s directors for the unexpired period of any warranty cover, the council said.