Codes of practice and service charters for businesses

As a business owner, your behaviour is governed by:

• laws
• codes of practice
• service charters.

It’s important to understand these obligations.

Obligations and service charters are guidelines for how to fairly deal with your customers.

Codes of practice

Codes of practice are usually put together after consulting representatives of:

• specific industries
• the community.

Codes can be mandatory or voluntary. Mandatory codes provide a minimum standard of protection to the consumers of particular industries under the Fair Trading Act 1987.

Voluntary codes are self-regulated with sponsorship:

• by industry associations, or
• in partnership with a government agency.

Membership of an industry association may be a condition of the codes.

Unlike mandatory codes, voluntary industry codes have more flexibility and can be altered in response to changing industry or consumer needs. Complying with voluntary codes can give you a competitive advantage by allowing customers to look for an industry endorsed logo for example. These codes result in better customer and business relations by establishing:

• agreed minimum standards of behaviour
• conduct for handling various trading situations.

Service charters

Service charters usually give certain expectations to customers:

• about the level of service to expect
• what will happen if the level of service is not met.

Because service charters are active documents, customers and the government expect your business to follow:

• codes, or
• charters.