restrictive practice

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1 Practices which affect the ability of firms to compete freely in markets for their products and inputs. This includes discrimination between customers by suppliers, exclusive dealing arrangements, and agreement or collusion to share out markets, either geographically or by products. Agreements embodying restrictive trade practices may be made illegal, or may require registration, so that they can be referred to a regulatory body.

2 Practices which affect the efficient use of labour. This may include demarcation of work between different employees, minimum manning levels on the workforce required for any given task, or refusal to cooperate with temporary or unqualified workers. Such practices are often justified as being necessary for the health and safety of workers, or of the general public: difficulties clearly can arise from having work done by staff who are insufficiently qualified, or too few to cope if anything goes wrong. However, they are criticized as being motivated by a desire to create more and safer jobs for ‘insiders’, and to restrict competition by ‘outsiders’. The reduction or elimination of restrictive labour practices is frequently part of productivity agreements. See also insiders and outsiders.

Subjects: Economics.

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