Hays set to appeal 30m OFT penalty

RECRUITER Hays yesterday said it is has been hit by a &pound;25m exceptional charge after being fined &pound;30.4m by the Office of Fair Trading (OFT).<br /><br />The UK&rsquo;s largest recruiter said that it planned to appeal the fine, which the OFT levied last month for its involvement in a price fixing activities over four years ago.<br /><br />The competition watchdog slapped the penalty on Hays &ndash; and smaller penalties on five other agencies &ndash; for acting as a cartel in the boycotting of ParcUK, an intermediary between recruiters and construction firms which threatened to erode the company&rsquo;s margins.<br /><br />&ldquo;Whilst Hays take the findings of the OFT&rsquo;s investigation seriously, we believe that the level of the fine is arbitrary and wholly disproportionate with the activities to which it relates, Hays&rsquo;s involvement in those activities and the way in which the OFT has dealt with other cases in the past,&rdquo; it said in a statement.<br /><br />The news came as Hays reported a 37 per cent drop in net fees in the first quarter, with private sector recruitment the worst hit.<br /><br />The firm said that it had seen signs of stabilisation in the UK and Australia, but was quick to stress that this did not indicate a recovery.<br /><br />&ldquo;Whilst the indications are that this year will be another tough year for our industry, the downturn presents opportunities for Hays to gain share, and we will continue to pursue those opportunities and invest in our business accordingly,&rdquo; said Hays&rsquo;s chief executive Alistair Cox.<br /><br />Hays said that it has further reduced its headcount by five per cent in the period, but that it is now &ldquo;actively seeking to maintain&rdquo; its staffing level.<br /><br />Analysts at Panmure Gordon said they remain cautious on the shares, &ldquo;particularly with the public sector getting tougher and the potential for a dividend cut&rdquo;.<br /><br />Shares in Hays rose initially yesterday, but closed 19 per cent lower at 106p.<br />