On June 23, 2023, new Competition Act amendments will come into effect. Of significance to employers and companies are the amendments under s. 45(1) which now criminally punish wage-fixing and no-poach clauses in contracts between unaffiliated employers. As of the date the amendments come into effect, it will be a criminal offence for unaffiliated employers to enter into agreements to refrain from soliciting or hiring each other’s employees, or to maintain, decrease or control salaries/wages and employment terms and conditions.

The punishment for non-compliance will be imprisonment for up to 14 years and/ or an uncapped fine, at the discretion of a judge. Employers, individuals, directors, officers and employees can all face punishment if found to have been involved in illegal anticompetitive activity captured by s.45. The Ancillary Restraints Defence is available if found to have committed an offence under s. 45. The Ancillary Restraint Defence under s. 45(4) can be used in scenarios where the challenged agreement is ancillary to a broader separate agreement and reasonably necessary to give effect to the broader agreement. However, the broader agreement relied on in the defence cannot contravene s. 45. The onus is on the employer or company to prove this on a balance of probabilities.