Enterprise Bill (HC Bill 112)

A

BILL

TO

Make provision relating to the promotion of enterprise and economic growth;
and provision restricting exit payments in relation to public sector
employment.

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—

Part 1 The Small Business Commissioner

The Commissioner

1 Small Business Commissioner

(1) 5A Small Business Commissioner is established.

(2) The Commissioner’s principal functions are—

(a) to provide general advice and information to small businesses (see
section 3), and

(b) to consider complaints from small businesses relating to payment
10matters in connection with the supply of goods and services to larger
businesses, and make recommendations (see sections 4 to 8).

(3) Schedule 1 makes provision about the Commissioner.

“Small businesses”

2 Small businesses in relation to which the Commissioner has functions

(1) 15In this Part “small business” means a relevant undertaking which—

(a) has a headcount of staff of less than 50,

(b) if the business threshold condition applies to the relevant undertaking,
meets that condition, and

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(c) is not a public authority.

(2) The Secretary of State may by regulations (“SBC scope regulations”) make
further provision about the meaning of “small business” in this Part.

(3) For the purposes of subsection (1)(b), the business threshold condition applies
5to a relevant undertaking if—

(a) SBC scope regulations provide for that condition to apply in relation to
all relevant undertakings, or

(b) the relevant undertaking falls within a description of undertakings to
which SBC scope regulations apply that condition.

(4) 10A relevant undertaking meets the business threshold condition if it has a
turnover, or balance sheet total, of an amount less than or equal to the small
business threshold.

(5) SBC scope regulations may (amongst other things) make provision about—

(a) the date (“the assessment date”) on which, or the period (“the
15assessment period”) for which, a relevant undertaking must meet a
requirement of subsection (1)(a) or (b) in order to be a small business;

(b) the calculation of the headcount of staff, turnover or balance sheet total
of a relevant undertaking at the assessment date or for the assessment
period;

(c) 20the circumstances in which a relevant undertaking which has been
established for less than a complete assessment period is to be regarded
as meeting a requirement for that period.

(6) SBC scope regulations may provide that a relevant undertaking of a specified
description is not a small business even if it falls within the definition.

(7) 25SBC scope regulations may—

(a) make transitional or transitory provision or savings;

(b) make different provision for different purposes.

(8) SBC scope regulations are to be made by statutory instrument.

(9) A statutory instrument containing SBC scope regulations may not be made
30unless a draft of the instrument has been laid before and approved by a
resolution of each House of Parliament.

(10) In this section—

  • “balance sheet total”, “headcount of staff”, “turnover” and “small business
    threshold” have such meanings as may be specified;

  • 35“relevant undertaking” means a person who is carrying on one or more
    businesses and whose registered office or principal place of business is
    in the United Kingdom;

  • “specified” means specified in SBC scope regulations.

General advice and information

3 40General advice and information

(1) The Commissioner may publish, or give to small businesses, general advice or
information that the Commissioner considers may be useful to small
businesses in connection with their supply relationships with larger
businesses.

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(2) In considering under subsection (1) what advice and information may be
useful, the Commissioner must, in particular, consider how useful any advice
or information would be for the purposes of encouraging small businesses to
resolve disputes with larger businesses or preventing such disputes arising.

(3) 5General advice or information published or given under subsection (1) may
include general advice or information about—

(a) principles of the law of contract;

(b) other sources of rights or obligations in relation to the supply of goods
or services;

(c) 10dispute resolution.

(4) General advice or information published or given under subsection (1) may
also include general advice or information about—

(a) complaint-handling bodies, ombudsmen, regulators or other persons
(other than courts or tribunals) who, in connection with small
15businesses’ supply relationships with larger businesses, may be able—

(i) to resolve or facilitate the resolution of disputes, or

(ii) to give other advice or assistance to small businesses;

(b) statutory rights to refer disputes in connection with such relationships
for adjudication by a person other than a court or tribunal.

(5) 20The Commissioner may publish, or give to small businesses, general advice or
information about—

(a) complaint-handling bodies, ombudsmen, regulators or public
authorities (other than courts or tribunals) who, in connection with the
supply relationships of small businesses with public authorities, may
25be able—

(i) to resolve or facilitate the resolution of disputes, or

(ii) to give other advice or assistance to small businesses;

(b) statutory rights to refer disputes in connection with such relationships
for adjudication by a person other than a court or tribunal.

(6) 30Advice published or given under this section must be impartial, and
information published or given under this section must be presented in an
impartial manner.

(7) The powers conferred on the Commissioner by this section to publish or give
general advice or information may be exercised by making arrangements with
35any other person in accordance with which that person publishes or provides
that advice or information.

(8) The Commissioner may make recommendations to the Secretary of State about
the publication, or provision to small businesses, by the Secretary of State of
advice or information of a kind which the Commissioner is authorised to
40publish or give under this section.

(9) Where a recommendation is made under subsection (8), the Secretary of State
must inform the Commissioner whether anything is to be done in response to
the recommendation and, if it is, give details of the action to be taken.

(10) For the purposes of this section a small business has a “supply relationship”
45with a larger business or public authority if—

(a) the small business has an agreement to supply, has supplied or may
supply, goods or services to the larger business or public authority, or

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(b) the larger business or public authority has an agreement to supply, has
supplied or may supply, goods or services to the small business.

(11) In this section—

  • “dispute” includes any difference;

  • 5“larger business” means a person carrying on one or more businesses
    who—

    (a)

    is not a small business,

    (b)

    has a place of business in the United Kingdom, and

    (c)

    is not a public authority.

10Complaints scheme

4 The SBC complaints scheme

(1) The Commissioner must establish, maintain and administer a scheme (in this
Part referred to as “the SBC complaints scheme”) under which the
Commissioner—

(a) 15enquires into, considers and determines relevant complaints, and

(b) may make recommendations as to how the issues raised by those
complaints may be remedied, resolved or mitigated or how similar
issues may be prevented from arising in future.

(2) The Commissioner must establish, maintain and administer the SBC
20complaints scheme in accordance with regulations made by the Secretary of
State under section 7 (scheme regulations).

(3) “Relevant complaint” means a complaint which—

(a) is made by a small business (“the complainant”) which has an
agreement to supply, or has supplied or may supply, goods or services
25to a larger business (“the respondent”),

(b) relates to a payment matter (see subsection (4)), and

(c) is not excluded from the scheme (see subsection (5)).

(4) A complaint relates to a payment matter if it relates to—

(a) a request or other act, or a failure to pay or other omission, in relation
30to a payment—

(i) for or in connection with the supply of goods or services, or

(ii) in connection with the relationship or possible relationship
between the small business and the larger business so far as
relevant to the supply, or

(b)
35any provision made or proposed to be made in connection with the
supply or that relationship which restricts, or purports to restrict, any
right of the small business to make a complaint under the SBC
complaints scheme or to have a complaint enquired into, considered or
determined under the scheme.

(5) 40A complaint is excluded from the scheme if—

(a) it relates to the appropriateness of the price payable or proposed to be
payable under a contract for the goods or services supplied or to be
supplied by the small business under the contract by comparison with
those goods or services,

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(b) it concerns matters which are currently the subject of legal proceedings
or adjudication proceedings,

(c) it falls within the jurisdiction of an ombudsman, regulator or public
authority (other than the Commissioner, a court or a tribunal),

(d) 5the complainant has a statutory right to refer the complaint for
adjudication by a person other than a court or tribunal,

(e) the complaint relates to—

(i) an act or omission which occurred before the appointed start
date, or

(ii) 10an act or omission in accordance with a term of a contract
entered into before that date, where that term has not been
varied on or after that date, or

(f) it is of a description specified by regulations made by the Secretary of
State.

(6) 15For the purposes of paragraph (e) of subsection (5), “the appointed start date”
means the date appointed by the Secretary of State by regulations.

(7) Regulations under this section may—

(a) make transitory or transitional provision or savings;

(b) make different provision for different purposes.

(8) 20Regulations under subsection (6) may appoint different dates for different
areas.

(9) Regulations under this section are to be made by statutory instrument.

(10) A statutory instrument containing regulations under this section (other than
regulations under subsection (6)) must not be made unless a draft of the
25instrument has been laid before and approved by a resolution of each House of
Parliament.

(11) In this section “larger business” has the meaning given by section 3(11).

5 Enquiry into, consideration and determination of complaints

(1) This section applies where a complaint is to be determined under the SBC
30complaints scheme.

(2) The Commissioner may ask the complainant or the respondent to provide the
Commissioner voluntarily with any information or documents relevant to the
complaint.

(3) The Commissioner must give the respondent, and may give the complainant,
35an opportunity to make representations to the Commissioner.

(4) In enquiring into, considering and determining a complaint, the Commissioner
must act impartially as between the complainant and the respondent.

(5) A complaint is to be determined under the SBC complaints scheme by
reference to what is, in the Commissioner’s opinion, fair and reasonable in all
40the circumstances of the case.

(6) The determination may contain one or more recommendations as to the steps
that ought to be taken by the complainant or the respondent to remedy, resolve
or mitigate any issue which is the subject of the complaint or to prevent a
similar issue from arising in future.

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(7) Where a complaint has been determined, the Commissioner must prepare a
written statement of the determination.

(8) The statement must give the Commissioner’s reasons for the determination
(including any recommendations).

(9) 5If the determination does not contain any recommendations, the statement
must contain the Commissioner’s reasons for this.

(10) The Commissioner must give a copy of the statement to the complainant and
the respondent.

(11) A determination made under the SBC complaints scheme is not legally
10binding.

6 Reports on complaints

(1) The Commissioner may publish a report of the enquiry into, consideration and
determination of a complaint under the SBC complaints scheme.

(2) A report under subsection (1) must not identify the complainant, unless the
15complainant consents.

See also section 7(7) which requires provision to be made about factors to be
taken into account when deciding whether to identify the respondent in a
report.

(3) A report identifies a person if it—

(a) 20mentions the person’s name, or

(b) includes any particulars which, in the Commissioner’s opinion, are
likely to identify the person.

(4) Before publishing a report under subsection (1), the Commissioner must give
the respondent and the complainant an opportunity to make representations
25to the Commissioner about the proposed publication of the report (including,
in the case of the respondent, about any proposal to identify the respondent in
the report).

7 Scheme regulations

(1) The Secretary of State must make regulations (“scheme regulations”) about—

(a) 30the making of complaints for consideration under the SBC complaints
scheme,

(b) the consideration and determination of, complaints by the
Commissioner, and the making of any recommendations, and

(c) the preparation and publication of reports under section 6.

(2) 35Scheme regulations must—

(a) provide that a complaint (or part of a complaint) is, except in specified
circumstances, to be dismissed if the Commissioner considers that the
complainant has not previously communicated the substance of the
complaint (or part) to the respondent and given the respondent a
40reasonable opportunity to deal with it;

(b) provide that a complaint is not to be entertained under the SBC
complaints scheme unless the complainant has referred it under the
scheme before the expiry of the applicable time limit (determined in
accordance with the scheme regulations);

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(c) provide that the Commissioner may extend that time limit in specified
circumstances.

(3) Scheme regulations may, among other things—

(a) make provision about the content and form of a complaint and the
5manner in which it is to be made;

(b) allow the Commissioner to fix time limits for any aspect of the
proceedings and to extend a time limit;

(c) provide that a complaint may, or may in specified circumstances, be
dismissed, if or to the extent that the Commissioner considers—

(i) 10that the complaint is frivolous or vexatious,

(ii) that the complaint concerns matters which are more
appropriately dealt with in another way,

(iii) that the complainant has not suffered, and is not likely to suffer,
any financial loss, material distress, material inconvenience or
15other material adverse effect, as a result of the matter to which
the complaint relates,

(iv) that the matter to which the complaint relates has been
remedied,

(v) that the complainant is seeking an outcome other than a
20recommendation of the kind that can be made under the
scheme,

(vi) that the complaint concerns matters that have been the subject
of legal proceedings or adjudication proceedings,

(vii) that the matter to which the complaint relates has previously
25been considered under the SBC complaints scheme or by
another complaints-handling body, ombudsman or regulator,

(viii) that any other condition specified by the scheme regulations is
met, or

(ix) that there are other compelling reasons why it is inappropriate
30for the complaint to be dealt with under the SBC complaints
scheme;

(d) provide that a complaint is to be dismissed if or to the extent that it
becomes the subject of legal proceedings or adjudication proceedings;

(e) require the Commissioner to notify the person who makes a complaint
35under the scheme if the Commissioner considers that it is not a relevant
complaint or it is dismissed in accordance with the scheme regulations;

(f) authorise or require the Commissioner to notify the person against
whom a complaint is made if it is not a relevant complaint or it is
dismissed in accordance with the scheme regulations.

(4) 40For the purposes of regulations under subsections (2)(a) and (3)(c) and (d) it
does not matter whether there has been a consideration of the merits of the
complaint by the time it is dismissed.

(5) Scheme regulations must also specify matters which are to be taken into
account, or are to be taken into account in specified circumstances, by the
45Commissioner in determining under the scheme whether an act or omission
was fair and reasonable.

Those matters must include any relevant law.

(6) But nothing in this section requires or authorises scheme regulations to specify
that particular practices are to be regarded by the Commissioner, in making
50that determination, as “fair” or “unfair”.

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(7) Scheme regulations must make provision about factors which are to be taken
into account, or are to be taken into account in specified circumstances, by the
Commissioner when deciding whether to identify the respondent in a report
under section 6(1).

(8) 5Scheme regulations may—

(a) confer a discretion on the Commissioner,

(b) make transitional or transitory provision or savings,

(c) make different provision for different purposes.

(9) Before making scheme regulations the Secretary of State must consult such
10persons as the Secretary of State considers appropriate.

(10) Regulations under this section are to be made by statutory instrument.

(11) A statutory instrument containing regulations under this section must not be
made unless a draft of the instrument has been laid before and approved by a
resolution of each House of Parliament.

(12) 15In this section—

  • “relevant complaint” has the meaning given by section 4(3);

  • “specified” means specified in scheme regulations.

8 Confidentiality

(1) The Commissioner may not make a disclosure of information that the
20Commissioner considers is likely to cause someone to think that a particular
person has made a complaint under the SBC complaints scheme, except where
subsection (2) applies.

(2) This subsection applies if—

(a) the Commissioner has obtained the consent of the person concerned,

(b) 25the disclosure is made by the Commissioner to the respondent in
relation to the complaint or in a report published under section 6,

(c) the disclosure is required for the purposes of any EU obligation,

(d) the disclosure is required, under rules of court or rules of a tribunal, or
an order of a court or tribunal, for the purposes of legal proceedings of
30any description, or

(e) the information has already been made available to the public from
other sources.

Reports and reviews

9 Annual report

(1) 35After the end of each reporting period, the Commissioner must prepare and
publish a report which—

(a) describes what the Commissioner has done during the period,

(b) contains a summary of the matters which the Commissioner considers
to be the most significant matters raised by small businesses with the
40Commissioner during the period, and

(c) states the Commissioner’s recommendations (if any) as to how any of
these matters might be addressed.

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(2) As well as publishing the report, the Commissioner must send a copy to the
Secretary of State.

(3) The Secretary of State must lay a copy of the report before Parliament.

(4) In this section “reporting period” means—

(a) 5the period beginning with the day on which section 1 comes into force
and ending with the following 31 March, and

(b) each successive period of 12 months.

10 Review of Commissioner’s performance

(1) The Secretary of State must review the Commissioner’s performance for each
10review period.

(2) For the purposes of subsection (1), the Secretary of State may direct the
Commissioner to provide the Secretary of State with information specified in
the direction.

(3) The first review period is the period beginning with the day on which section
151 comes into force and ending 2 years after the following 31 March.

(4) Subsequent review periods are each successive period of 3 years after the first
review period.

(5) A review must, in particular, assess how effective the Commissioner has been
in carrying out his or her functions, and in doing so may, in particular, assess
20the impact of the Commissioner’s actions on—

(a) improving payment practices in commercial transactions;

(b) the awareness of small businesses of, or the use by small businesses of,
alternative dispute resolution procedures.

(6) As soon as practicable after a review period, the Secretary of State must—

(a) 25publish a report of the findings of the review for that period, and

(b) lay a copy of the report before Parliament.

Power to abolish

11 Power to abolish the Commissioner

(1) The Secretary of State may, by regulations, abolish the office of Small Business
30Commissioner if, as a result of a review under section 10, the Secretary of State
is satisfied that—

(a) it is no longer necessary for there to be a Small Business Commissioner
carrying out the functions under this Part, or

(b) the Commissioner’s role has not been sufficiently effective to justify the
35office’s continued existence.

(2) For the purposes of subsection (1)(b), the Secretary of State must, in particular,
take account of the Commissioner’s role in—

(a) carrying out any of the functions under this Part,

(b) improving payment practices in commercial transactions, and

(c) 40improving the awareness of small businesses of alternative dispute
resolution procedures.