Recruiters must not be tempted into collective agreements over setting prices, warned a senior employment lawyer, after an investigation was launched into alleged breaches of competition law by eight recruitment agencies.

Employment law expert Kevin Barrow, partner at Blake Lapthorn, told Recruiter the Office of FairTrading (OFT) was “specifically looking at the recruitment industry and the way the staffing sector works”.

He warned recruiters not to make collective agreements on pricing, which might appear to be particularly attractive in a downturn.

The OFT alleges that A Warwick Associates Ltd of Southend; Beresford Blake Thomas; 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.

The OFT also alleges the companies 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  004 to between the end of 2005 and early 2006, was in breach of the Competition Act 1998, which prohibits anti-competitive agreements.

Industry sources told Recruiter that the intermediary concerned is a managed services company. Hays, Randstad 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.