Wage-Fixing Agreements

Wage-fixing agreements are agreements in which employers jointly set the wages, benefits, pay increase rates or other working conditions of their employees. They are the labour market equivalent of price-fixing in product markets: employers stop competing to attract employees by offering better pay.

The Competition Board’s Approach

The Competition Board treats wage-fixing agreements, like no-poach agreements, as clear and serious infringements, i.e. cartels. The Board’s 2024 Guidelines on Competition Infringements in Labour Markets expressly include joint setting of pay and working conditions. The Board’s 2005 decision on TV series producers jointly setting actors’ fees is an early example.

Exchange of Pay Information

Even without a direct agreement, company-level exchange of current or future pay, raise rates and benefits between rival employers may be an infringement as information exchange. Risky examples include:

• HR managers sharing next year’s raise rates with each other,
• Company-level current pay data circulating through trade associations,
• Setting common “pay scales” or “starting salary” recommendations.

Safe Pay Benchmarking

Pay surveys conducted by an independent body, containing historical and aggregated data in which individual companies cannot be identified, generally carry no risk. Companies are advised to meet benchmarking needs through such surveys and avoid discussing pay directly with competitors. HR teams should also be part of the audience of a competition compliance programme.