In its recent advisory bulletin, the Competition Commission (the "Commission") advises on potential competition risks with regard to employment practices, particularly in the determination of employment terms and conditions and the hiring of employees.
The Commission considers the following practices between undertakings are at risk of contravening the First Conduct Rule of the Competition Ordinance (Cap. 619) (the "Ordinance"):
- Wage-fixing agreements: Undertakings that reach an agreement between themselves on any element of compensation are in effect fixing the price of labour. Compensation includes salaries and other allowances such as insurance benefits, housing allowances, relocation support, severance payments or long service payments.
- Non-poaching agreements: Undertakings that reach an agreement or exchange information for the purposes of solicitation, recruitment or hiring of each other's employees.
- Exchange of sensitive information: Sharing of competitively sensitive information between undertakings about their intentions in employees' compensation or hiring, whether done directly or through a third party.
Employers should keep details regarding the compensation they pay to employees confidential. They should not be disclosed to a competitor.
Employers who wish to participate in salary surveys should ensure that adequate measures are in place so that the person conducting the survey complies with the Ordinance, including ensuring that they do not disclose the results of the survey in such a way that may give rise to concerns of breaching the Ordinance.