A number of recruitment agencies which supply engineers to local authorities have been fined a total of £39m by the Office of Fair Trading (OFT) for price-fixing and boycotting another company.
Of the six agencies, Hays Specialist Recruitment was hit with the biggest fine of £30m, and is actively considering an appeal.
The agencies were found to have collectively boycotted an intermediary company, Parc UK, for the supply of candidates to construction firms in the UK, and for agreeing to fix target fee rates for the supply of candidates to such intermediary companies.
The OFT concluded that the agencies breached the Competition Act 1998. The other agencies fined were A Warwick Associates, CDI AndersElite, Eden Brown, Fusion People, and Henry Recruitment.
The other two agencies involved – Beresford Blake Thomas and Hill McGlynn & Associates – were granted immunity from fines in return for exposing the cartel.
The price-fixing began after Parc entered the market in 2003 with a business model to act as an intermediary between construction firms and recruitment agencies. The agencies formed a cartel, which met five times between 2004 and 2006, and agreed to boycott Parc and fix the fee rates they would charge to intermediaries.
Alistair Cox, CEO of Hays, said: ‘Hays believes that the level of the fine is wholly disproportionate with the activities to which it relates.’
A source said it was likely that local authority frameworks would be reviewed as a result of the ruling. ‘The agencies involved in price-fixing may or may not continue to supply, but even if they are able to demonstrate a professional approach, the financial burden of their substantial fines may affect their ability to deliver best value,’ he said.
Register now for full access
Register just once to get unrestricted, real-time coverage of the issues and challenges facing UK transport and highways engineers.
Full website content includes the latest news, exclusive commentary from leading industry figures and detailed topical analysis of the highways, transportation, environment and place-shaping sectors.
Use the link below to register your details for full, free access.
Already a registered? Login
