Hays and OFT in row over £30m fine for role in cartel
Thursday 01 October 2009
Recruitment group Hays got embroiled in a public spat with the Office of Fair Trading (OFT) yesterday after it was fined, along with five others, for forming a cartel that fixed prices and boycotted another firm in the construction job market.
Hays, which got the biggest fine, said its £30.36m charge was "wholly disproportionate with the activities to which it relates. The group is actively considering an appeal."
The OFT found eight recruitment groups guilty of breaches of the Competition Act, levying fines worth a total of £39.27m against six, Hays, A Warwick Associates, CDI AndersElite, Eden Brown, Fusion People and Henry Recruitment. Two, Beresford Blake Thomas and Hill McGlynn avoided fines after blowing the whistle on the cartel.
The eight formed a cartel, known as the Construction Recruitment Forum, which met five times between 2004 and 2006. The eight agreed to fix prices for the supply of workers to the construction sector and agreed to cut an intermediary company, Parc UK, out of any deals.
Hays' Chief executive Alistair Cox, said: "We take the findings of the OFT investigation seriously. However, it is important to recognise that the OFT's investigation related to an isolated matter arising from the conduct of a single employee who is no longer with the company and affected only a small part of our UK Construction & Property business."
However, Heather Clayton, a senior director at the OFT, and one of those that conducted the investigation, said she could not reconcile Mr Cox's claim that the fine related to "an isolated matter." Hays said the phrase related to the totality of the OFT report.
"This is a serious breach of competition law and the levels of fines reflect this," said Ms Clayton. "Ultimately it is the consumer and the wider economy that loses out from such behaviour."
CDI AndersElite, a subsidiary of the US firm CDI, which attracted the second biggest fine of just over £7.5m, also said it was considering an appeal: "CDI will be analyzing [ sic] the specifics of the decision and will be evaluating its options."
The fines are worked out by considering a number of factors, including the turnovers of the companies. All of the groups involved took advantage of the OFT's leniency programme, which cut the fine in return for cooperation with the investigation.
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