Recruitment firms fined for forming cartel

7 October 2009

8 October 2009 | Paul Snell

Six recruitment agencies in the construction sector have been fined a total of £39.3 million for price-fixing and the collective boycott of a company by the Office of Fair Trading (OFT).

CDI AndersElite, A. Warwick Associates, Eden Brown, Fusion People, Hays Specialist Recruitment and Henry Recruitment were fined for their part in the cartel and agreeing to withdraw from or refusing to enter into contracts with intermediary Parc UK. The group met five times between 2004 and 2006. The UK market for the recruitment of construction, technical and engineering workers is estimated to be worth £4.6 billion a year. Two firms, Beresford Blake Thomas and Hill McGlynn & Associates, were granted immunity from the fine for disclosing the cartel to the OFT following an application for leniency from their parent company at the time, Select Appointments.

Five companies had their fines reduced after they were granted leniency by the OFT. A. Warwick Associates, which went out of business before the OFT announced the fines, did not receive a reduced penalty. The fines for the six firms, which were determined by extent of involvement, admissions and if the firm has challenged the OFT's evidence, were:

A. Warwick Associates - £3,303

CDI AndersElite - £7,602,789

Eden Brown - £1,072,069

Fusion People - £125,021

Hays Specialist Recruitment - £30,359,129

Henry Recruitment - £108,043

Hays, which received the largest fine, said the penalty was "wholly disproportionate" and is considering an appeal. The company's 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 and property business."

Heather Clayton, senior director at the OFT, said: "This is a serious breach of competition law and the level of fines reflects this. Cartels such as these can impact on other businesses, in this case construction companies, by distorting competition and driving up staff costs."

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