'We're providing businesses with the certainty and predictability they need to ensure that they're in full compliance with the law'
The Competition Bureau has published its wage-fixing and no-poaching enforcement guidelines.
The guidelines “provide businesses transparency and clarity” on the bureau's enforcement approach to the new criminal provisions coming into force on June 23, 2023.
With the 2022 amendments to the conspiracy provision (section 45) of the Competition Act, it will be a criminal offence for employers to agree:
- to fix, maintain, decrease or control wages or other terms of employment
- to refrain from hiring or trying to hire one another's employees.
The new amendments coming into force are an important step in the ongoing modernization of Canada's competition law, according to Matthew Boswell, commissioner of competition.
“With these enforcement guidelines, we're providing businesses with the certainty and predictability they need to ensure that they're in full compliance with the law."
In addition, with the new rules, all fines for offences under the conspiracy provision — including agreements to fix prices, allocate markets, restrict supply, fix wages or refrain from hiring — will be determined at the court's discretion. Under the previous provision, fines were capped at a maximum of $25 million.
The bureau will also update its Immunity and Leniency Programs to include the new wage-fixing and no-poaching provisions. These programs are the bureau’s “most powerful tools for detecting and stopping criminal conduct prohibited by the Competition Act,” it says.
Previously, a legal expert told Canadian HR Reporter the amendments were rushed through as part of the Budget Implementation Act and “drafted incredibly broad.”
Enforcement guidelines for wage fixing, poaching
The enforcement guidelines state that the amendments prohibit agreements between unaffiliated employers:
- to fix, maintain, decrease or control salaries
- to fix, maintain, decrease or control wages
- to fix, maintain, decrease or control terms and conditions of employment, where “terms and conditions” include the responsibilities, benefits and policies associated with a job.
As for no-poaching agreements, the changes prohibit “agreements between unaffiliated employers to not solicit or hire each other’s employees,” says the Competition Bureau.
“When an agreement limits an employee’s job opportunities, the bureau may examine whether the limitation is in furtherance of a no-poaching agreement. Limitations designed to prevent employees from being solicited or hired by another party to the agreement could include, for example, restrictions on the communication of information related to job openings and the adoption of biased hiring mechanisms.”
As further clarification, this applies only to agreements to not solicit or hire “each other’s” employees so when a restraint contained in an agreement only applies to one employer, the bureau will view it as “one-way” and not applicable to “each other’s” employees.
“However, when there are separate agreements between two or more employers that result in reciprocating promises to not poach each other’s employees, then the bureau may take enforcement action.”
Previously, an expert told Canadian HR Reporter that poaching “is generally seen by the community of hirers and recruiters as the way to give companies the best competitive advantage. And this process of poaching that’s happening right now is actually forcing companies to become just more competitive overall.”
