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I joined a new job at a Bank, and when filling out the forms, one of the policy documents stated that I had to open an account with them and have my pay paid into that.

I told this to a friend when a legal background, and they said:

They can't do that, that's Third line forcing.

By Third Line Forcing, she meant an anti-competitive practice where the supply of goods and services is conditional on the purchase of good from a third party.

Australian Law calls this Exclusive Dealing. Acts of this nature are prohibited under s47 of the Competition and Consumer Act 2010.

(I can't find a reference for the equivalent UK or US statutes).

My question is: If a Bank Employer directs me to have my salary paid only into one of their accounts, is that Third Line Forcing?

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  • Employer offers cheaper/free service to employees, to avoid potential conflict of interests. There's nothing wrong with this from an ethical or moral standpoint, I don't see that it would be legally problematic in itself, either. – Nij Jun 2 '16 at 0:11
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Unfortunately, s47 of the Act applies only to the supply of goods and services - that is, where you purchase something from a business or person.

This means that because you are being required to have your salary paid into an account with that bank as part of your employment contract, it's unlikely that this would apply.

My understanding is that banks will generally provide an account free of charge - it is unlikely that damages are recoverable (because there are none).

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  • Wow - great answer. Do the Common Law principles of anti-competitive law apply in this scenario? – hawkeye May 31 '16 at 11:16
  • @hawkeye gnasher addresses this point in their answer - it might, but the proportion of the entire market that works for the bank is so small it's unlikely that it would be found to violate anticompetitive behaviour law. – jimsug May 31 '16 at 21:06
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From conversations with bank employees, the reason is that using a different bank means you might be put under strong pressure by a competitor of your employer, which isn't a good idea.

However, in the cases that I knew of, employees would get considerable better conditions than the general public would.

Anti-competitive: Ask yourself, what percentage of the Australian population would be affected by this?

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