This week the Office of Fair Trading (OFT) fined six recruitment agencies a total of £39.3m for price fixing and the collective boycott of another company in the supply of candidates to the construction industry.
A Warwick Associates, Beresford Blake Thomas, CDI AndersElite, Eden Brown, Fusion People, Hays Specialist Recruitment, Henry Recruitment and Hill McGlynn & Associates were all found to have breached the Competition Act 1998.
Blake Lapthorn law firm has compiled a list of 10 do’s and don’ts for recruiters to make sure they minimise risks and comply with anti-competition law.
- 1. Make independent decisions about dealing with particular clients based on justified concerns, eg creditworthiness
- 2. Obtain information on competitors’ business and pricing from publicly available sources, such as the media or from customers
- 3. Keep records of meetings with clients and competitors and sources of information (and remember that they could be made public if an investigation occurs);
- 4. Discuss pricing or margins, or exchange financial or client-based information with competitors in any way, even if it is based on historic sales, discounts or terms of business (unless objectively justifiable)
- 5. Enter into an agreement to share geographic markets, categories of client or market sectors
- 6. Agree with competitors to jointly refuse to deal with a particular client
- 7. Discuss with competitors current or prospective tenders or contracts
- 8. Warn a competitor or new market entrant to stay off your patch
- 9. Have discussions or make plans with competitors to keep new arrivals out of the market
- 10. Provide services below cost to drive competitors out of the market
The law firm also advised recruiters to make sure they implement a written policy for dealing with competition laws in their business. This could include the education and training staff, implementing a “clearance” or checking system for activities which are potentially anti-competitive, and monitoring and auditing behaviour and documents.
The Hays Group is one of the UK’s leading recruitment consultancies, and includes Hays Human Resources, one of the leading players in the HR recruitment market. Its chief executive Alistair Cox argued that the level of the fine was unbalanced.