The Competition Commission published its Advisory Bulletin to provide guidance on employers’ joint negotiations with employee bodies on employment matters

The Competition Commission (the “Commission”) published an Advisory Bulletin on 29 August 2022 to provide guidance on the application of the Competition Ordinance to employers’ conduct in joint negotiations with employee bodies on employment matters (“joint negotiations”), and the Commission’s enforcement priorities regarding such joint negotiations.

In a joint negotiation, a number of employers may jointly negotiate with employee bodies for the purpose of determining employment conditions.  Under the present framework of Hong Kong competition law, such joint negotiations may involve forming an agreement on or the sharing of competitively sensitive information on employment conditions, which may give rise to a concern under the First Conduct Rule under the Competition Ordinance.

In the Advisory Bulletin, the Commission states that it does not presently have an intention to commence investigations or take enforcement actions against employers for certain conduct in the context of joint negotiations.  However, this is subject to the condition that the joint negotiations with employee bodies are justifiable, having regard to the following factors:

(i)            industry characteristics;

(ii)           purpose of the conduct, whether it is to improve relevant employment conditions; and

(iii)          whether the employee bodies are genuine participants in the joint negotiations.

Employers should note that the above is applicable to the following situations:

(i)            the making of compensation recommendations by groups of employers to their members which include the results of joint negotiations with employee bodies (e.g. to adjust compensation at a certain rate without fixing the level of salary itself); and

(ii)           if necessary for the preparation for or during joint negotiations, the sharing of expectations about future compensation among employers.

The Commission may revisit its position in the future. Therefore, employers should keep an eye on developments and publications issued by the Commission from time to time.

26 September 2022
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