Wage-fixing and no-poaching agreements will be outlawed from June 23, 2023, as a result of the Competition Act amendments contained in the implementation bill for Canada’s 2022 federal budget. Employers who are parties to wage-fixing or no-poach agreements (such as franchisors and franchisees) will need to examine their agreements in light of the new provisions.
The new provision prohibits two kinds of agreements between unaffiliated employers:
The new provision will be added to the Competition Act’s existing conspiracy offence in section 45. Section 45 makes it a criminal offence for competitors to fix prices, allocate customers, or restrict output. Prior to the amendments, this provision only applied to agreements relating to the supply, and not the purchase, of a product. Because wage-fixing and no-poach agreements are “buy-side” agreements, they were not covered by the existing conspiracy provision.
An important difference between the new wage-fixing offence and the existing price fixing offence is that the wage-fixing offence applies to agreements between employers that are not affiliated with each other, whereas the price fixing offence applies to agreements between competitors with respect to a product. In other words, employers do not need to be competitors with each other for there to be an offence; it is enough that they are not...
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