The Turkish Competition Authority, in its announcement dated September 16, 2024 ("Announcement"), has declared that the "Draft Guidelines on Competition Violations in Labor Markets" ("Draft Guidelines"), which aims to regulate the principles of competition violations in labor markets under The Act no 4054 on the Protection of Competition ("the Act no 4054"), has been opened for public consultation as per the decision dated September 12, 2024, and numbered 24-37/888-M.
As stated in the Announcement, the purpose of the Draft Guidelines is to set forth the basic principles for assessing and monitoring the impact of behaviors that prevent, distort, or restrict competition within the borders of the Republic of Türkiye on labor markets. It also aims to clarify how such infringements are evaluated by the Competition Board, to highlight the points that third parties should consider regarding these infringements, to explain the criteria for evaluating ancillary restrictions in agreements between competitors in labor markets, and to define the scope in which Articles 5, 6, and 7 of The Act no 4054 may be applied to agreements and practices in labor markets.
It is evident that in the Draft Guidelines, there is a focus on the structural characteristics that create imbalances in the labor markets, particularly through the practices of retaining employees or hiring employees from each other, creating a competitive environment.
More specifically, the Draft Guidelines extensively address wage-fixing agreements between employers under Article 4 of The Act no 4054. As known, these agreements, which range from determining employees' wages to working hours, social benefits, compensations, physical working conditions, and the right to leave, are agreements where enterprises jointly set the basic working conditions in the labor market. These are considered direct restrictions on competition under the law and are deemed unlawful. The Draft Guidelines emphasize that such agreements are cartel-like and seriously disrupt competition in the labor market.
The Draft Guidelines also detail the provisions related to the application of Articles 5, 6, and 7 of Act no 4054. Referring to Article 5, which defines possible exemptions for agreements that restrict competition under certain conditions, the Guidelines underline that directly anti-competitive agreements, such as wage-fixing and no-poach agreements, are unlikely to qualify for these exemptions due to their primary aim of unfairly restricting competition rather than providing any economic benefit to consumers or the market.
Furthermore, under the light of Article 6 of the Law, the Draft Guidelines assess the impacts of exclusionary practices and the effects of dominant enterprises on competition in both product and labor markets. As a significant topic, Article 7 addresses the effects of mergers and acquisitions on labor markets, emphasizing the need for a cumulative assessment of various factors, including the employee profiles of the involved parties, levels of unionization, job-switching costs, and potential competitive pressure in the market
Comments and feedback on the Draft Guidelines should be submitted via the published opinion form and sent to isgucu@rekabet.gov.tr by September 27, 2024.
The Draft Guidelines can be accessed here, and the opinion form can be found here.
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