New Criminal Conspiracy Provision in the Competition Act Addresses Wage-Fixing Agreements and No-Poach Agreements

Earlier this year, Bill C-19, the Budget Implementation Act, 2022, No. 1 (the “Bill”) was passed by the federal legislature and became law. The Bill makes several important amendments to the Competition Act (the “Act”) including, most notably for employers, the implementation of a new provision prohibiting wage-fixing agreements and no-poach agreements. More specifically, the new provision makes it a criminal offence to engage in either type of conduct.

As detailed in the text of the Bill, a wage-fixing agreement occurs where an employer conspires, agrees or arranges with an unaffiliated employer to fix, maintain, decrease or control wages or other terms of employment. For its part, a no-poach agreement refers to the situation where employers conspire, agree or arrange to refrain from hiring or soliciting one another’s employees.

An employer who is found to have violated this new provision of the Act by engaging in either a wage-fixing agreement or a no-poach agreement is guilty of an indictable offence and faces imprisonment for up to 14 years or a fine to be set at the discretion of the court, or both.

 

In Our View

Although the Bill has already become law, the new provision on wage-fixing agreements and no-poach agreements will not come into effect until June 23, 2023. Accordingly, employers still have ample time to ensure that they are in compliance with these particular legislative requirements before facing potentially serious legal consequences.

For more information, please contact Steven Williams at 613-940-2737 or Paul Lalonde at 613-940-2759.

 

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