Hong Kong Competition Law’s Effect to the Employment Marketplace

The Hong Kong Competition Commission posted an advisory on April 2018 informing businesses about the risks the competition law may bring about to their employment practices. The commission specified a few practices that may go against the regulations stipulated in the Competition Ordinance.

Under its First Conduct Rule, businesses are not allowed to implement or involve themselves in agreements that may affect competition in the country. Enterprises should decide with respect to the competition parameters, even with the relevant details of their employment processes. The following are some examples of anti-competitive practices in the employment marketplace:

Wage-fixing agreements

Business agreements connected to employee compensations may amount to illegal price-fixing, which is considered a significant anti-competitive conduct based on the Competition Ordinance. These agreements concern not just salaries but benefits and allowances as well.

Non-poaching agreements

When businesses engage in agreements relating to the solicitation of hiring one another’s employee, this may be considered illegal market sharing. Based on the Competition Ordinance, this is considered another anti-competitive conduct.

Sensitive information exchange

It is also considered non-compliance when businesses share competitively sensitive information connected to employee salary or even their hiring systems to each other. Whether the information sharing is performed first-hand or through an outside party, unilaterally or reciprocally, the act may be deemed contravening to the Competition Ordinance.

This advisory by the Hong Kong Competition Commission is a proof that the commission is actively implementing their regulations related to anti-competitive employment-related processes employed by businesses in the country. The commission may take violation cases to the Competition Tribunal and may implement serious financial penalties, along with other sanctions from the tribunal.

According to experts in competition law in Hong Kong, businesses must carefully assess their existing employment practices and related agreements to fully comply with the regulations set by the commission.

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