Questions of conscionability

Doesn't this mean that when a large business organisation negotiates a contract with a small business organisation, it is bound by law to act in a conscionable manner … but when that same large business negotiates with an individual person, it can be as unconscionable as it likes?

Well, yes. And this was rather the point which the NSW Industrial Relations Commission was trying to make.

Perhaps, given that the Government currently appears minded to reconsider the WorkChoices legislation, one change which might find its way into the legislation could be an equivalent to section 51AA of the Trade Practices Act 1974; a provision to make unconscionable conduct in AWA negotiations unlawful; and to make AWAs negotiated under such circumstances, unenforceable. Alternatively, a provision could be inserted allowing the Federal Court - or even the Fair Pay Commission - to repair such contracts in order to remove the effects of unconscionability from them.

The counterargument, of course, is that such a provision may well lead to increased litigation and increased uncertainty among the contracting parties. Initially, that seems to be a fair argument. But the experience of section 51AA of the Trade Practices Act tends to suggest that such concerns are unwarranted. After all, a contract is not unconscionable just because one negotiating party is at a disadvantage. Neither is it unconscionable just because the outcome favours one party more than another.

But if a work contract is negotiated, and the outcome is truly objectionable - so outrageous that it is almost insultingly contrary to our collective conscience as a society - then why would we let such a contract stand?