Competition watchdog warns of employment conditions sharing between employers

Sharing of competitively sensitive information on employment conditions among employers may give rise to competition concerns under the Competition Ordinance, according to an advisory bulletin published by the city’s competition watchdog on Monday.

The Competition Commission said employers, in general, should be competing vigorously against each other on employees’ compensation and other employment conditions in hiring and retaining employees.

Any employers who agree or share competitively sensitive information on employment conditions in the process may raise concerns under the First Conduct Rule of the ordinance.

The commission's statement also noted that joint negotiations between groups of employers or more than one employer and employee bodies to determine employment conditions may also violate the ordinance if the process involves agreements or the sharing of competitively sensitive information regarding employment conditions between employers.

However, noting the purpose of joint negotiations and the benefits it may have on improving employment conditions for employees, and considering its enforcement priorities, the Commission said it has no current intention to pursue an investigation or enforcement action against such actions during joint negotiations.

The watchdog highlighted that such conduct will be accepted when the need for relevant employers to jointly negotiate with employee bodies is justified given the industry characteristics and the purpose of the conduct is to improve employment conditions.

Meanwhile, the watchdog also reminded employers that the Commission does intend to investigate practices which do not meet the aforementioned conditions and raise competition concerns.

“In particular, when members of groups of employers share information amongst themselves about their intentions over employment conditions, or make a recommended compensation announcement outside the context of joint negotiations, such conduct may constitute a contravention of the Ordinance,” the commission’s statement wrote.