OFT fines construction recruiters £39m

30th Sep 2009 11:30

The Office of Fair Trading today landed its second heavy blow on the construction industry in little over a week with a total of £39.3m in fines for six suppliers of workers to the industry. The six recruitment companies received the penalty after allegations of price-fixing and for a boycott of Parc UK, a rival construction worker supplier, which entered the market in 2003. The six firms - A Warwick Associates, Beresford Blake Thomas, CDI AndersElite, Eden Brown, Fusion People, Hays Specialist Recruitment, Henry Recruitment and Hill McGlynn & Associates ran a cartel called the Construction Recruitment Forum - which met five times between 2004 and 2006. Instead of competing with Parc - and each other - on price and quality, the Construction Recruitment Forum agreed to boycott Parc and also co-operated to fix the fee rates they would charge to intermediaries, such as Parc, and also certain construction companies, the OFT said. Beresford Blake Thomas and Hill McGlynn & Associates were granted immunity from fines as they informed the OFT of the cartel activity. All the fines were reduced on leniency grounds, without which the fines would have totalled £173m. 'This is a serious breach of competition law and the level of fines reflects this. Cartels such as these can impact on other businesses, in this case construction companies, by distorting competition and driving up staff costs,' Heather Clayton, OFT Senior Director said.On 22 September, the OFT fined more than a hundred construction firms £130m in total for price fixing and collusion.