Earlier this year, a group of sports broadcasters were fined millions after being found guilty of pay collusion. Lucilia Falsarella Pereira from the Competition and Markets Authority explains why HR needs to understand the importance of remaining independent when it comes to competition law.
HR professionals are the people who help shape company culture, keep things running smoothly and make sure everyone’s playing by the rules.
They’re often the first to spot when something’s not quite right and are the ones who turn legal advice into clear, practical steps for the business.
That’s why it’s important for HR to be in the loop to ensure businesses stay on the right side of the law.
Pay settlements
The Competition and Markets Authority’s recent investigation into the pay of freelancers working on events such as football games and rugby tournaments in the sports production and broadcasting industry shows there is a job to be done in helping businesses understand competition law.
We know most companies are keen to do the right thing and we are focused on working with them to make this happen.
But in this investigation, we found that five companies – Sky, BT, IMG, ITV and BBC – colluded on rates of pay for freelancers like camera operators and sound technicians.
Four of the companies – BT, IMG, ITV and BBC – were collectively fined £4.2 million, while Sky avoided the fine for blowing the whistle and co-operating under our leniency policy.
For HR teams, this case is a reminder that staff should be careful about what information they share with rivals. The bottom line is – staff must learn the rules and stick to them.
What went wrong?
We found that pairs of companies exchanged sensitive information about pay, such as day rates and special rates, during holiday periods on 15 occasions.
In an email exchange between two companies that discussed pay for production workers, one company stated, “that’s exactly the same as we pay. Good to know we are aligned there.”
Another message said, “we have no intention of getting into a bidding war – just want to be aligned and benchmark the rates.”
This type of behaviour can result in freelancers being paid less than they otherwise would have been.
These kinds of conversations, even if informal or well-intentioned, are illegal when they involve competitors discussing or coordinating pay.
How to avoid this happening in your company
This case is important for anyone involved in setting pay such as those recruiting or retaining staff. Here’s what you need to know:
1. Pay must be set independently. Discussing how much you intend to pay with competitors is illegal and it should be clear to staff that this is off limits.
For HR teams, this is a reminder that staff should be careful about what information they share with rivals.”
HR must ensure that all pay decisions are made independently – not based on conversations with competitors.
2. Train your teams. Anyone involved in setting pay needs to understand the basics of competition law. If you speak to competitors, it’s as simple as stop and think about what you share. Here’s some helpful advice on understanding business cartels, avoiding anti-competitive behaviour and complying with competition law.
3. Create a culture where it’s easy to speak up. If something has gone wrong, it’s important that staff feel confident to speak up and are clear on how to do this. This can go a long way in preventing or de-escalating some of the issues we see.
4. The benefits of cooperation. If your organisation discovers it may have breached competition law, early cooperation with the CMA under our leniency regime could lead to reduced penalties. In this case, Sky avoided a fine entirely by reporting the cartel to us.
What’s next?
More guidance on competition law and labour markets is on the way.
In the meantime, HR professionals should take this opportunity to review internal practices, update training materials and ensure that everyone involved in hiring understands the rules.
This will ensure that businesses compete fairly and stay on the right side of the law.
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