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Legal Update

Competition Commission Clarifies Position on Collective Bargaining and Trade Associations

2 April 2015
Mayer Brown JSM Legal Update

The Hong Kong Competition Commission (the "Commission") published a set of revised draft guidelines ("Guidelines") to the Competition Ordinance (Cap. 619) (the "CO") on 30 March 2015. The revised Guidelines are a good indication of how the Commission intends to interpret the CO, however they are not legally binding and may be subject to further revision.

Collective Bargaining

The Commission takes the view in the revised Guidelines that collective bargaining between a group of employees and their employer in relation to employment matters such as salaries and conditions of work will not be considered a contravention to the CO, as employees are an integral part of the employer. In particular, the Guidelines state that the CO will not apply to collective negotiations between an employer and a trade union where it acts as an agent representing a number of employees.

Employers should take note that the situation would differ if a trade union represented employees of more than one employer, in collective negotiations with two or more employers who are competitors in the industry. In such industry-wide collective negotiations, the employees and employers involved would not form part of an integral unit, as such their collective conduct would fall within the scope of the CO. (Please see our previous legal update here on collective bargaining for wages through trade unions.)

Trade Associations

The revised Guidelines clarify that any decision or recommendation made by or through a trade association comprising of competitors can potentially be anti-competitive, even if not binding on its members. Employers need to be aware that recommended fee scales and "reference" wages or commission rates suggested by trade associations would likely contravene the CO.

Authors

  • Duncan A. W. Abate
    T +852 2843 2203
  • Hong Tran
    Partner
    T +852 2843 4233

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