The Office of Fair Trading OFT is close to completing its investigation into alleged breaches of competition law by eight recruitment agencies operating in the construction sector.

An OFT spokesperson told Recruiter that following the investigation, first reported in Recruiter in July 2006, decisions would be made “soon - this autumn”.

The OFT alleges in a statement of objections that A Warwick Associates Ltd of Southend; Beresford Blake Thomas (BBT); CDI AndersElite; Eden Brown; Fusion People; Hays Specialist Recruitment; Henry Recruitment, and Hill McGlynn Associates entered into agreements to fix target rates for the supply of candidates to intermediaries and to certain construction companies.

Guy Lougher, a partner at Pinsent Masons, told Recruiter that if the OFT ruled against them, it was likely to impose significant fines on the recruitment agencies.

The minimum starting point when setting fines for price fixing is 5% of “relevant turnover” says Lougher.  However, this can be increased by a “multiplier” to reflect the length of time that the price fixing had been going on. On top of this, he says the OFT can impose an “escalator.” This reflects the fact that where the fine arrived at is only a small percentage of group turnover it doesn’t act as a sufficient deterrent to stop future breaches, and should therefore be increased.

The news comes a day after the OFT imposed fines totaling £129.5m on 103 construction firms in England after ruling they had colluded with competitors on building contracts.

The OFT also alleges the eight recruitment agencies had boycotted a particular ‘intermediary’ by making an agreement to withdraw and/or refrain from entering into contracts to supply candidates to construction companies in the UK.

The behaviour, which allegedly took place from late 2004 to between the end of 2005 and early 2006, was in breach of the Competition Act 1998, which prohibits anti-competitive agreements.??

In October 2008, industry sources told Recruiter that the intermediary concerned is a managed services company.

Hays, Randstad (parent company of BBT and Hill McGlynn) and Eden Brown said they were “cooperating fully” with the OFT and Hays added that following an internal investigation it was “confident” the investigation was over “an isolated matter”.?Randstad said the OFT’s Statement of Objection was not an admission of guilt. The OFT said the statement did not mean that the recruiters involved were guilty.