OFT fines recruitment companies

Six recruitment companies, including Hays Group, have been fined £39.3m for price fixing and boycotting a new rival that supplied workers to the construction industry.

The Office of Fair Trading said the recruiters breached competition law by agreeing not to undertake any contracts with ParcUK, which started up in 2003 as an intermediary between recruiters and construction firms. They also agreed to fix the rates they would charge builders.

"This is a serious breach of competition law and the level of fines reflects this," said Heather Clayton, a senior director at the antitrust regulator. She said the cartel activity, which took place between 2004 and 2006, distorted competition and drove up hiring costs.

The companies punished were Hays Specialist Recruitment, A Warwick Associates, CDI AndersElite, Eden Brown, Fusion People and Henry Recruitment.

Hays Specialist Recruitment, a subsidiary of Hays, was penalised £30.4m - the highest fine. Hays fell 3.9 per cent, or 3.59 per cent, to 104.7p in morning trading.

Two other recruitment agencies involved were granted immunity from fines because they exposed the cartel, the OFT said, and most of those fined were given discounts for leniency.

The OFT's action comes a week after it imposed fines totalling £129.5m on 103 construction firms for bid-rigging activities.

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