Guidance

Employers advice on how to avoid anti-competitive behaviour

Published 9 February 2023

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This publication is available at https://www.gov.uk/government/publications/avoid-breaking-competition-law-advice-for-employers/employers-advice-on-how-to-avoid-anti-competitive-behavior

If you think you have been involved in anti-competitive behaviour, report it to us.

Collusion between employers is illegal and there are significant financial and personal consequences for breaking the law.

Anti-competitive agreements can negatively impact labour markets, including:

  • reducing employees’ pay packets
  • reducing employee mobility and choice
  • limiting a business’s ability to expand

Anti-competitive behaviours

There are 3 main types of anti-competitive behaviours in labour markets (which are all examples of business cartels)

No-poaching agreements

No-poaching agreements occur when 2 or more businesses agree not to approach or hire each other’s employees (or not to do so without the other employer’s consent).

Wage-fixing agreements

Wage-fixing agreements occur when 2 or more businesses agree to fix employees’ pay or other employee benefits. This includes agreeing the same wage rates or setting maximum caps on pay.

Information sharing

Sensitive information about terms and conditions that a business offers to employees might be shared between businesses. This in turn reduces competition between those in recruitment and retention.

Not all illegal agreements or practices are in writing; they might take the form of informal practices - sometimes known as gentleman’s agreements.

These agreements or practices might cover freelancers and contracted workers as well as permanent salaried staff.

Actions businesses can take

Businesses, legal advisers and recruiters can follow these steps:

  • understand how competition law applies to no-poaching and wage-fixing agreements
  • don’t agree with a competitor to fix wages
  • don’t agree with a competitor not to approach or hire each other’s employees
  • don’t share sensitive information about your business or employees with a competitor
  • provide recruitment staff with training on competition law and how it applies in the recruitment context
  • ensure solid internal reporting processes are in place, and that staff are aware of these and how they can use them

If you’ve entered into a no-poaching or wage-fixing agreement, consider applying to the CMA for leniency.

Reporting anti-competitive behaviour

We can investigate businesses in all sectors if there are reasonable grounds to suspect the law is being broken, such that fair competition when recruiting and retaining talent is being undermined.

Any anti-competitive behaviour should be reported to us.

If you’ve witnessed an illegal business cartel or been involved in one, you can do the right thing by reporting it to us.

If you’ve seen something

If the information you provide leads to an investigation, you may earn a reward.

If you’ve been involved

Tell us and you may get leniency.

Call us: 020 3738 6833

We can provide confidential guidance.

For more information on how to spot and report anti-competitive activity, visit the CMA’s Cheating or Competing campaign page.

Seek independent legal advice if you think you may have broken the law.

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