OVERVIEW OF WAGE-FIXING AND NO-POACHING
CRIMINAL CONSPIRACY OFFENCES
UNDER SECTION 45 OF THE COMPETITION ACT
“Like price-fixing agreements between competitors, wage-fixing and no-poaching agreements undermine competition. Maintaining and encouraging competition among employers results in higher wages and salaries, as well as better benefits and employment opportunities for employees.”
(Competition Bureau,
Wage-fixing and no-poaching agreements are illegal in Canada)
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On June 23, 2022, the Competition Act was amended to add wage-fixing and no-poaching agreements between employers to the existing criminal conspiracy offences under section 45 of the Act. These amendments came into force on June 23, 2023. For more information about these amendments, see: Amendments.
In this regard, a new criminal conspiracy offence provision (section 45(1.1)) was added to the Competition Act to address wage-fixing and no-poaching agreements between employers.
This amendment was based, among other things, on jurisprudence under section 45 (the criminal conspiracy provision of the Competition Act) that held that, unlike the former conspiracy offence provision, the current section 45 did not apply to upstream agreements between competitors (i.e., fixing the price or other aspects of competition for products or services supplied to downstream purchasers, such as in the case of competing employers paying employees’ wages).
Following these amendments, under section 45(1.1)(a) of the Competition Act, it is a criminal offence for non-affiliated employers to agree to agree to fix, maintain, decrease or control salaries, wages or terms and conditions of employment (i.e., wage-fixing agreements between employers).
Under section 45(1.1)(b) of the Competition Act, it is a criminal offence for non-affiliated employers to agree to not solicit or hire each other’s employees (i.e., no-poaching agreements between employers).
The potential penalties for violating the wage-fixing and no-poaching offences under section 45(1.1) of the Competition Act are a fine in the discretion of the court (i.e., with no prescribed limit), imprisonment for up to 14 years, or both.
The Competition Bureau has issued Enforcement Guidelines on wage-fixing and no-poaching agreements and other related enforcement guidance for employers. For more information, see: Wage-fixing and no-poaching agreements are illegal in Canada and Enforcement Guidelines on wage-fixing and no-poaching agreements.
In addition, the Competition Bureau has revised its Immunity and Leniency Programs to include the new criminal wage-fixing and no-poaching conspiracy offences.
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