The Competition Ordinance (Cap. 619) ("Competition Ordinance") came into full effect on December 14, 2015. There are three major competition rules under the Competition Ordinance, which are the First Conduct Rule ("FCR"), the Second Conduct Rule, and the Merger Rule. In particular, employers should be aware of the FCR, which, subject to certain exemptions, prohibits an undertaking from making an agreement or engaging in a concerted practice that has the object or effect to prevent, restrict, or distort competition in Hong Kong.

According to the Guideline on the FCR issued by the Competition Commission on July 27, 2015, discussions, collective bargaining, or arrangements (as the case may be) with respect to salary or other conditions of work between one or more employees and their employers, or between a trade union and an employer, are outside the scope of the FCR. The primary risk for employers lies in agreements or arrangements between competing employers. Agreements between competing employers to restrict hiring from a particular competitor, fix wages, or exchange competitively sensitive information, such as wage and employment terms, may all constitute contraventions of the FCR. Employers should be particularly careful when making informal exchanges of sensitive information that may occur, for example, in networking associations among human resources professionals in a particular industry.

Unless "serious anti-competitive conduct" is involved, the FCR does not apply to agreements and concerted practices if the combined turnover of the undertakings involved does not exceed HK$200 million in the relevant turnover period. Conduct that seeks to fix prices, share markets, restrict outputs, or rig bids are all considered to be "serious anti-competitive conduct" under the Competition Ordinance.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.