The Competition for Talent and Price-fixing. This post outlines the significance of the Competition Act for recruiting firms unfairly demanding rival firms pay information from job applicants. There must be fair competition for talent if recruitment is to be fair.
The Competition Act outlines a fair and competitive economic environment
Legislation prevents firms from unfair competition for talent and from conducting corporate espionage i.e. spying on competitor firms’ salary structures in order to price-fix wage offers or poach staff.
The same legislation dissuades firms from treating applicants unfairly, yet most job advertisers lack pay transparency and marginalize job applicants’ human right to dignity and their economic right to pursue and negotiate better opportunities.
The opening statement of the Act says:
To provide for the establishment of a Competition Commission responsible for the investigation, control and evaluation of restrictive practices, abuse of dominant position, and mergers; and for the establishment of a Competition Tribunal responsible to adjudicate such matters; and for the establishment of a Competition Appeal Court; and for related matters.
WHAT’S RELEVANT FOR RECRUITMENT?
Control and evaluation of restrictive practices
- the omission of pay information in job adverts: given the growth of inequality, why do the Public Protector and Auditor General condone this?
- Lack of job advertising standards allows recruiters to place adverts merely for the sake of market research purposes thereby falsely advertising positions to a desperate market
- Adopting unfair power advantages and information asymmetry means Recruiters can force job applicants to surrender confidential information or be expelled from the recruitment process.
- the demand for pay slips as a criterion for potential employment. This practice discriminates against those who have been unemployed and cannot provide records
- pay slips used as a wage determinant is a restrictive practice as firms don’t compete fairly for talent
- Firms place restrictions on wage offers based on information contained in pay slips, this is a breach of the applicant’s trust as the firm is using information provided by the applicant – against the applicant. This has been cross-referenced with a legal case in South Africa, Dun and Bradstreet.
- abuse of dominant position
- Firms force recruiters to obtain pay slips from applicants or no trade agreements ensue. If this information is permitted to be shared, why do firms not contact each other for it and post their pay packets on their websites?
- Wage information allows firms competing for talent to spy on each other, job applicants are thereby forced into committing industrial espionage
- Firms use privileged information to unfairly compete for talent
Ordinary citizens pursuing a role in the economy are equal to the employed who interview them. Job applicants cannot be unfairly treated simply because they are in a vulnerable job-seeking position.
In a free economy wages may not be price fixed. Labour has the enshrined right to seek opportunity and pursue better wages.