2nd UPDATE: UK Regulator Fines Staffing Cos For Price-Fixing
September 30 2009 - 8:11AM
Dow Jones News
U.K. competition watchdog the Office of Fair Trading Wednesday
fined six recruitment agencies a total of GBP39.27 million for
price-fixing and the collective boycott of another company in
supplying job candidates to the construction industry.
Hays Specialist Recruitment, a unit of Hays PLC (HAS.LN), took
the bulk of the fine and will pay GBP30.4 million, although the
parent company said it is considering an appeal against a sum it
considers "wholly disproportionate with the activities to which it
relates."
The decision comes just a week after the OFT fined 103
construction firms a total of GBP129.5 million for colluding with
rivals on building contracts. That was one of the largest
price-fixing probes ever undertaken by the regulator.
The OFT said that it had found that A Warwick Associates,
Beresford Blake Thomas, CDI AndersElite, Eden Brown, Fusion People,
Hays Specialist Recruitment, Henry Recruitment and Hill McGlynn
& Associates had all broken competition rules when supplying
candidates to the construction industry. CDI AndersElite is a unit
of CDI Corp. (CDI) of the U.S.
It said Beresford Blake Thomas and Hill McGlynn &
Associates, both units of Randstad Holding NV (RAND.AE), had been
granted immunity from fines because they first provided the OFT
with evidence of the cartel activity.
Dutch firm Randstad said its companies had been involved when
they were still part of Vedior, which Randstad acquired in
2008.
"Randstad takes all matters of business conduct and ethics very
seriously. Our code of conduct, integrity code and competition law
guide are implemented throughout the group of companies. In
relation to this case clear commitments have been provided to
prevent any infringement in the future," it said.
Hays in a statement said it thought the GBP30.4 million fine
levied on Hays Specialist Recruitment was too much given the
activities to which it relates, Hays' involvement in those
activities, and the way the OFT has dealt with other cases in the
past.
Hays Chief Executive Alistair Cox said the matter related to a
single employee who is no longer with the company and affected only
a small part of Hays' construction and property busines. He said
the company takes the findings of the OFT probe seriously and had
strengthened employee compliance and training in this area.
"At all times Hays has independently determined the price and
terms on which it has dealt with its customers and at no stage did
the matters investigated by the OFT affect Hays' dealings with its
clients," Cox said.
All the companies applied for, and were granted, leniency, apart
from A Warwick Associates, which is in liquidation. The leniency
meant that the total fine was reduced from GBP173 million.
The company boycotted was Parc UK, which entered the market in
2003 with a new business model to act as an intermediary between
construction companies and the recruiters. That put pressure on the
recruitment firms' margins, the OFT said, and prompted the
companies to set up a forum that boycotted Parc and cooperated to
fix the fees they would charge intermediaries and certain
construction firms. The OFT said the so-called "Construction
Recruitment Forum" met five times between 2004 and 2006.
-By Steve McGrath, Dow Jones Newswires; 44-20-7842-9284;
steve.mcgrath@dowjones.com