New rules prohibiting wage-fixing and no-poaching agreements kick in Friday in an effort to crack down on companies undermining competition at employees’ expense.As of June 23, it is a criminal offence for two or more employers to form deals that fix, maintain, decrease or control wages. The same goes for agreements that prevent companies from hiring or soliciting each other’s employees.
“Like price-fixing agreements between competitors, wage-fixing and no-poaching agreements undermine competition,” states the Competition Bureau, which is responsible for the administration and enforcement of the Competition Act.“Maintaining and encouraging competition among employers results in higher wages and salaries, as well as better benefits and employment opportunities for employees.”
But that didn’t apply to companies’ practices when compensating for labour. Instead, agreements between competing purchasers were viewed under civil provisions contained in Section 90 of the act, which prohibits deals likely to substantially prevent or lessen competition. The amendment applies only to pacts between unaffiliated employers. That means wage-fixing or no-poaching agreements between two or more corporate entities controlled by the same parent company do not violate the provisions.