Scenarios based on the Code
These scenarios have been developed based on questions from industry.
Scenario 1 – Forms, obligations and record keeping requirements for retailers, suppliers and contractors
Question:
Michael owns 'Bridal Elegance' and retails bridal gowns and bridal accessories. Veronica owns 'Anything Bridal' and is a supplier to 'Bridal Elegance'. Veronica contracts all of the embellishment work for the wedding dresses to Kim who performs the work at her business premises. Michael, Veronica and Kim would like to know:
- Are they required to use the forms provided in the Code?
- What are their obligations?
- What records are they required to keep and for how long?
Answer:
The Code recognises that most businesses have their own procedures in place. This means Michael, Veronica and Kim do not have to use the forms so long as all the information required can be provided in the one document and is legible. The only exceptions are Forms 1, 3A and 4A.
In this scenario, there are two agreements for the manufacture of the wedding dresses: one between Michael and Veronica, and one between Veronica and Kim. Their obligations are outlined below:
1. Agreement between Michael and Veronica (retailer and supplier agreement).
Michael is the retailer and is required to provide Veronica with information as set out in Form 2. Most contracts contain the information required by Form 2. If they do, then this information will satisfy the requirements of the Code. Michael may attach the contract to Form 2, writing 'see attached' on Form 2, and provide this to Veronica. Michael should also ask Veronica if she will be using outworkers and ask her to provide him with an undertaking as set out in Form 3A. Michael's other obligations are to:
- provide the Department of Justice and Attorney-General and the relevant union a written report twice a year (Form 1) – the report must contain a list and the details of all suppliers he has entered into an agreement with for the period ending 28 February and 31 August of each year
- keep a copy of all records about the agreement for six years.
Veronica is the supplier and is required to provide to Michael an undertaking as set out in Form 3A and also provide him with information as set out in Form 3. Most invoices contain the information required by Form 3. If so, the invoice will satisfy the requirements of the Code. Veronica can attach the invoice to Form 3, writing 'see attached' and provide to Michael. Veronica's other obligations are to:
- provide information to Michael so he can comply with his obligations
- provide Michael with details of her agreement with Kim (see below for further information)
- advise Michael of any changes to the agreement
- keep a copy of all records about the agreement for six years.
2. Agreement between Veronica and Kim (supplier and contractor agreement).
Veronica is required to provide to Kim information as set out in part 1 of Form 4.
As the contractor, Kim is required to provide Veronica:
- information as set out in Part B of Form 4 – if Kim includes the information as required in Part B of Form 4 on the invoice then this will satisfy the requirements of the Code, she can attach the invoice to form, writing 'see attached' and provide to Veronica
- an undertaking as set out in Form 4A.
Kim's other obligations are to:
- provide information to Veronica so she can comply with her obligations
- advise Veronica of any changes to the agreement
- keep a copy of all records about the agreement for six years.
Scenario 2 – The Code and charitable organisations
Question:
Julia works in the uniform shop at a private girls’ high school and also at her son’s state primary school. The clothes are sold by retail from the uniform shop. Does the Code apply to either private or state schools?
Answer:
The Code does not apply to charitable organisations. Charitable organisations are defined in the Code as “organisations that carry out activities for religious, educational, benevolent or charitable purposes which are not also carried out for securing pecuniary profit for its members.” Therefore state schools should always be exempt because profits from the sale of uniforms should be distributed to the school community.
Provided that private school falls under the Code’s definition of a ‘charitable organisation’, it is likely they will also be exempt from the application of the Code because they would also distribute profit to the school community.
Scenario 3 - Retailers and suppliers obligations
Question:
Mary manufactures clothing in-house and then sells the completed items from her retail outlet. Mary outsources the embroidery to Sharon who performs this work at her business premises.
Mary and Sharon are confused as to whether they are retailers, suppliers or contractors and what information they are required to complete.
Answer:
Mary is the retailer and would be required to enter into an agreement with Sharon and complete Form 1 and provide Sharon with information as set out in Form 2. Mary should also ask Sharon if she will be using outworkers and ask her to provide her with an undertaking as set out in Form 3A.
Sharon becomes the supplier based on the Code’s definitions of ‘supplier’, ‘supply’ and ‘manufacture’ and would be required to complete information as set out in Forms 3 and an undertaking as set out in Form 3A.
Scenario 4 – Supplier’s, contractor’s and retailer’s obligations
Question:
James Knight owns ‘Knight Clothing’. James manufactures menswear but outsources the tie production to Dianne who performs the work at her business premises. James then wholesales the completed items to various retail outlets.
James would like to know what information both he and Dianne need to complete under the Code.
Answer:
Knight Clothing is the supplier. James would be required to make an agreement with the various retail stores and provide information as set out in Forms 3 and an undertaking as set out in Form 3A.
Dianne is a contractor based on the Code’s definitions of ‘contractor’, ‘supply’ and ‘manufacture’, and would be required to provide information as set out Form 4 and an undertaking as set out in Form 4A.
The recipient and seller of the finished items is the retailer and would be required to complete Form 1 and Form 2.
Scenario 5 – Agreement reference number
Question:
Sharon has a large clothing manufacture business and sells her clothing range to many retail stores. Sharon is familiar with her requirements under the Code however she has noticed that all the forms refer to an ‘Agreement Reference Number’. Sharon would like to know:
- Who initiates the agreement number?
- Who maintains the register?
- Is the numbering system meant to be numeric or alphabetical or a combination of both?
Answer:
The agreement numbers are not dealt with by the Code – they are initiated by the parties to the agreement. In practice, the retailer is likely to determine the agreement number because the retailer will generally initiate the making of an agreement.
The Code does not provide that a register be established but requires that all relevant documents associated with an agreement must have the same agreement number.
The format of the agreement numbers can be in whatever form is meaningful to the parties to the agreement.
Scenario 6 – The Code and imported clothing products
Question:
Bill owns a retail store and imports all the clothing products from overseas. Bill would like to know whether he has obligations under the Code.
Answer:
The Code applies where clothing products are manufactured in Australia and intended for retail sale in Queensland.
The Code will not apply in the situation where clothing products are manufactured entirely overseas and remain unaltered when retailed.
If the clothing products are altered or embellished in any way within Australia and intended for retail sale in Queensland, the Code applies and Bill will be required to provide the appropriate information as required by the Code.