Changes to the Competition Act affecting Employers

Recent amendments to the Competition Act will make it a criminal offence for employers to enter into “wage-fixing” and/or “no-poaching” agreements with other employers. These prohibitions apply to agreements between employers regardless of whether they are competitors, or not. The changes come into force on June 23, 2023.

Wage-fixing agreements

The Act prohibits agreements between un-affiliated employers which fix, maintain, decrease or control salaries, wages or terms and conditions of employment.

No-poaching agreements

The Act also prohibits agreements between un-affiliated employers not to solicit or hire each other’s employees. This prohibition does not apply to a one-sided agreement by one employer not to poach employees of another business. It does, however, prohibit employers from mutually agreeing not to solicit or hire each other’s employees.

Scope

The definition of “Employer” includes directors and officers, as well as agents or employees, including HR professionals. Both corporations and individual employees may face prosecution for entering into an agreement prohibited by the Act.

Penalties

A person found guilty of an offence under the Act may be imprisoned for up to 14 years, subjected to a fine at the discretion of the Court, or both.

More Information

For more information on how these changes could impact your employment and hiring practices, please do not hesitate to reach out to any member of our Employment & Labour Law Group.

If you would like to read more about this subject, please see this article, written by our colleague and competition law expert, Carol Anne O’Brien.