On May 30, 2023, Canada’s Competition Bureau (Bureau) published Enforcement Guidelines (Guidance) to provide clarity on its enforcement approach to the new criminal prohibition against wage-fixing and no-poach agreements that comes into force on June 23, 2023. The new provision prohibits unaffiliated employers from entering into agreements or arrangements to fix wages or other terms and conditions of employment (wage-fixing agreements) or to not hire or solicit each other’s employees (no-poach agreements).
Summary of the Guidance
The Guidance has a number of elements relevant to businesses that operate in Canada. They include:
Wage-Fixing Prohibition Casts a Wide Net. Provision captures agreements between employers regardless of whether they are competitors. The scope is broad. “Terms and conditions of employment” are terms that “could affect a person’s decision to enter into or remain in an employment contract.” This may include job descriptions, working hours or work location, among others.
New and Existing Agreements Captured. The new provision will apply to agreements made on or after June 23, 2023, and to “conduct that reaffirms or implements” agreements in existence as of that date. The Guidance clarifies the Bureau’s view that at least two parties must reaffirm or implement agreements and re-establish a “meeting of the minds.”
Ancillary Restraints Defence Applies. The Bureau’s approach to the ancillary restraints defence will be consistent with the approach outlined in its Competitor Collaboration Guidelines. Wage-fixing and no-poach agreements entered into in connection with bona fide merger transactions, joint ventures or strategic alliances are unlikely to be problematic, provided that their scope is not broader than necessary in the circumstances.
For more background on these changes and the key takeaways for businesses, see our January 2023 Blakes Bulletin: Competition Bureau Publishes Draft Guidance on Wage-Fixing and No-Poach Agreements, our May 2023 Blakes Bulletin: New Criminal Prohibition Against Wage-Fixing and No-Poach Agreements Coming Soon and our November 2022 podcast episode, Canada’s Competition Act to Ban Wage-Fixing and No-Poach Agreements.
For more information, please contact any member of our Competition, Antitrust & Foreign Investment group.
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