HRD’s pocket guide to... competition law
Thirza Tooes, January 02, 2018
Our latest pocket guide explores the finer points of competition law
Why do I need to know about it?
Competition law doesn’t only apply to products or services, it can apply to people too. “It’s important for HR professionals to be aware that
if they agree with their peers not to compete for employees, or share sensitive information that could distort competition or suppress wages then they could breach competition law,” explains Nicole Kar, head of competition UK
“HR professionals need to be able to navigate competition laws to ensure the business avoids mistakes, resulting in huge financial penalties and reputational damage,” agrees Sandy Begbie, director of global people, organisation and culture integration at Standard Life. He warns that with increased collaboration there is a danger some business interactions may cross the boundary of what is legal.
Not only do HRDs need a personal knowledge of competition law, they need to ensure that knowledge is spread appropriately throughout the organisation. A recent Competition and Markets Authority (CMA) survey found that few UK businesses felt they knew competition law ‘well’ and only 6% admitted running specific training for their staff on it.
What do I need to know?
“Competition law has a simple starting point: anti-competitive collusion between businesses is illegal,” says Ann Pope, senior director for antitrust at the CMA. “Discussing your company’s business with staff at rival companies can be risky territory, especially if you enter into any sort of agreement about how you will compete. Just attending meetings with competitors where such things are discussed can get your business into trouble.”
Kar advises making it clear from the start you will not be part of any such discussions. “It’s essential to know where conduct raises competition law risks, and if this is broached to note your objection and leave – a so-called ‘noisy exit’,” she explains. “If you sit in silence you will be considered to have taken account of the information and could be held liable for someone else’s poor judgment.”
Begbie highlights two key areas of legislation HRDs should be aware of: the Bribery Act and the Public Interest Disclosure Act. “The laws and regulations are changing all the time and therefore it’s important for HR professionals to keep up to date with developments,” he adds.
Where can HR add value?
HR adds the most value by ensuring organisations, and their employees, steer clear of competition law risks. Starting with inductions and training, HR can then ensure a culture of compliance is created throughout the business.
“Having the right policies isn’t enough on its own; to be effective they need to be properly communicated,” says Begbie. “This needs to start at board level, with leadership creating an environment and culture where employees feel safe to speak up where there are concerns about malpractice. This can be achieved through regular communication, appropriate training, record keeping, and monitoring behaviour, as well as implementing a confidential third-party whistleblowing hotline.”
“There has been less focus on HR teams when training for competition law compliance is conducted within organisations and an awareness of the basic principles is essential both to protect the firm and individuals in the HR team,” says Kar. “Equally it is important to be clear on what the law permits or does not consider anti-competitive.
“Misunderstanding of the requirements of the law can lead to HR teams being nervous about any industry interaction, which can hinder competitiveness and productivity.”
“We recognise that businesses have time pressures, and that SMEs in particular need quick and easy guidance to help them understand their legal responsibilities,” says Pope. “The CMA has developed a range of simple guidance that explains the key things businesses need to know about competition law.”