Ottawa adds wage-fixing, no-poaching provisions to leniency program

Update 'increases transparency and predictability for potential applicants'

Ottawa adds wage-fixing, no-poaching provisions to leniency program

The federal government is expanding the extent of the Immunity and Leniency Programs to include the Competition Act’s new wage-fixing and no-poaching provisions.

“The update increases transparency and predictability for potential applicants. It also enhances the ability of both organizations to prepare cases for prosecution,” noted the federal government.

The new criminal conspiracy provisions, which came into force on June 23, 2023, prohibit companies from undermining competition by:

  • Agreeing to fix, maintain, decrease or control wages or other terms of employment; or
  • Agreeing to refrain from soliciting or hiring each other’s employees.

Ottawa outlawed wage-fixing agreements and no-poaching agreements in 2023. There had previously been civil provisions around these two acts.

How immunity and leniency works

Under the Immunity and Leniency Programs, a party implicated in domestic or international unlawful conduct that may violate the Competition Act's criminal provisions may offer to cooperate with Competition Bureau Canada and request immunity. 

A company may – but does not have to – initiate an application on behalf of its employees.  Meanwhile, employees may approach the bureau on their own behalf.

With the inclusion of the new provisions, an employer outside of Canada who enters into a wage-fixing or no-poaching agreement that affects Canadian employees – contrary to subsection 45(1.1) – may now also seek immunity.

“It is not necessary for a party to have assembled a complete record of the information required when first contact is made with the Bureau. As the application process progresses, and before an immunity agreement is finalized, the [Commissioner of Competition] and the [Director of Public Prosecutions] (DPP) will carefully examine an applicant's immunity request and subsequent cooperation to ensure that it complies with the Immunity Program's requirements.” 

However, “an applicant is required to provide complete, timely and ongoing cooperation, at its own expense, throughout the Bureau's investigation and any subsequent prosecution, including witnesses' travel to and from the Bureau or DPP offices.”

Under the rules, the commissioner will recommend to the DPP that immunity be granted to a party in only the following circumstances:

  • the Bureau is unaware of an offence, and the applicant is the first to disclose all elements of the offence; or
  • the Bureau is aware of an offence, and the applicant is the first to come forward before the Bureau gathers sufficient evidence to warrant a referral of the matter to the DPP.

“The Bureau and the PPSC will continue to review and update the programs as required in light of changing circumstances and decisions by the courts,” according to the federal government.

More details about the changes are available here.

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