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ACM warns employers: non-hiring arrangements are prohibited

Over the past 12 months, the Netherlands Authority for Consumers and Markers (ACM) has received multiple reports about possible illegal arrangements in the Dutch labor market. ACM warns employers that non-recruitment and non-hiring arrangements harm employees and society as a whole, and are therefore also prohibited under European and Dutch competition rules.

In some sectors, such energy and engineering, skilled staff is scarce right now. The job market has been tight already for several years now, and seems to get even tighter. Some fear that this scarcity may have an effect on, for example, a smooth and swift energy transition. ACM also recognizes that risk.

Some employers, employers’ organizations, and trade associations are in favor of arrangements about not recruiting or even not hiring each other’s employees. However, such non-recruitment and non-hiring arrangements are prohibited, as are mutual arrangements for restricting wage growth outside of collective agreements.

That is because those kinds of mutual arrangements among employers disrupt the proper functioning of the job market, and lead to lower wages and less favorable terms of employment and working conditions. Such arrangements may offer short-term savings in employers’ salary costs, but they have negative effects on employees and on society at large, especially in the long term. For example, they could reduce technological innovation and the incentive to efficiency in a sector.

What does a well-functioning job market look like?

In a well-functioning job market, scarcity creates pressure to raise wages and to improve terms of employment and working conditions. That will allow employers more to attract and retain employees. Higher wages, improved terms of employment and working conditions also promote the inflow from other sectors. Specialist programs could anticipate such developments because students will have excellent job opportunities. In that context, recognition for the professional group could also go up if wages, terms of employment, and working conditions are excellent. Furthermore, higher labor costs act as an incentive to techological innovation and efficiency, which will result in welfare gains for society as a whole.

Cooperation is allowed but there are limits

In 2019, ACM published guidelines regarding arrangements between competitors. The basic principle is: cooperation between competitors is allowed, but there are limits. 

Do you have information about possible illegal practices? If so, please contact ACM. 

See also

See also