Employers beware: final warning for “job cartels”
Only months after suspending an investigation into a possible wage-fixing cartel, the Dutch Authority for Consumers and Markets (ACM) has warned employers, employers’ organisations, and trade associations to not engage in no-poach agreements.
Well-functioning labour markets and sound (employed and self-employed) worker conditions are on the minds of many competition authorities (see our January 2022 newsletter). Companies should double-check their recruitment and hiring policies. This may very well have been the ACM’s last warning before proceeding to active enforcement.
No-poach arrangements
Similar to the European Commission (see our November 2021 newsletter), the ACM considers that no-poach arrangements may dampen (technological) innovation, efficiency and market entry. The greater the shortage of skilled personnel in a particular sector, the more likely competition authorities will be on the look-out for potential no-poach or no-hiring arrangements. The energy and engineering sectors are currently considered as high-risk by the ACM in this regard.
Wage-fixing arrangements
Wage-fixing arrangements have also caught the ACM’s eye. Whereas the competition rules apply to these type of arrangements, ‘wage-fixing’ on the basis of a collective labour agreement (reached through collective bargaining between employers and employees) falls outside the cartel prohibition. The thin line between wage-fixing and collective bargaining, therefore, requires careful consideration.
The ACM suspended a preliminary investigation into potential wage-fixing between supermarkets for this particular reason. After collective labour negotiations had broken down, various supermarkets allegedly coordinated a 2.5% wage increase for their staff. The investigation was, however, discontinued because the supermarkets and employees reached a new collective agreement in the end. It is noteworthy that the ACM finds that even in the context of collective agreement negotiations, the competition rules can apply if the negotiations are (temporarily or permanently) broken off.
The distinction between (illegal) wage-fixing and (legal) collective bargaining may also play a part in negotiations between sole self-employed persons and their clients. The Commission’s draft Guidelines for solo self-employed persons intend to encourage collective bargaining in a similar fashion to the ACM’s earlier guidelines (see our February 2020 newsletter). Both guidelines clarify under which conditions solo self-employed persons are considered comparable to workers and can enter the (legal) collective bargaining arena without falling under the cartel prohibition.
Conclusion
Companies may want to re-read the paragraphs in the ACM's 2019 guidelines on horizontal agreements on labour and temporary staff and (re)consider their recruitment and hiring policies. The ACM seems to have fired its last warning shot against “job cartels”. Enforcement action may therefore be imminent.
This article was published in the Competition Newsletter of March 2022. Other articles in this newsletter:
