What is restrictive practice? Definition and meaning

Restrictive Practice has several meanings and interpretations. It may refer to an arrangement by a group of workers to restrict the entry of new workers or limit output – their aim is to protect their own interests. Companies may also be involved in restrictive practices. Most activities carried out by commercial enterprises to inhibit competition fall into the category of restrictive practice.

The term is commonly used both in the plural and singular – you can say ‘restrictive practice’ or ‘restrictive practices. The plural form is with a countable noun.

In the second half of this article, you can read about the term ‘restrictive practice’ in a caregiving setting.

An unfair practice

Restrictive practices have been around for thousands of years. They undermine competition and are not done for the benefit of consumers or society in general.

According to Collins Dictionary, “Restrictive practices are ways in which people involved in an industry, trade, or profession protect their own interests, rather than having a system which is fair to the public, employers, and other workers.”

Restrictive practice in business

In the corporate world, the following are considered as examples of restrictive practices:

  • Abuse of a dominant market position by a large company.
  • Restricting the entry of new competitors into a specific market.
  • Restraining fair and open competition.
  • A major customer tells a supplier not to supply to its smaller competitors.
  • The major players collude to fix prices.
  • The dominant players collude to limit the supply of a good or service.
  • A dominant company dramatically lowers its prices – to below the cost of production – in order to destroy its smaller competitors.

Such practices can often lead to reduced market dynamics and limit consumer choices, effectively altering the competitive landscape.

Restrictive practice – trade unions

The term – restrictive practice – originates from managerial and political usage, but today it is commonly used in the study of labor relations.

A trade union may insist that a specific task is carried out by a large group of workers when, in fact, a much smaller number would be sufficient to do the job safely and effectively – this is called overmanning. Overmanning is a form of restrictive practice.

Restrictive practice may occur when a trade union limits the kind of work that members of other trade unions are allowed to do for an employer.

  • Closed shop

This is a system that trade unions use to control who works where. In a closed shop system, you can only get a specific job and stay in it if you are already a member of a union, or are willing to join it.

The practice of only accepting workers to a post if they are already union members – pre-entry shops – or forcing them to join if they want the job – post-entry shops – are illegal today both in the UK, USA, as well as in several European countries.

The restrictive practice is illegal on the grounds that compulsory membership infringes an individual’s civil rights.

The owners and managers of five major business in the UK – building & civil engineering, cotton, iron & steel, printing, and engineering – said that when trade unions came onto the scene one century ago with their restrictive practices, productivity suffered considerably.

According to a book – Productivity and Trade Unions – written by Ferdinand Zweig, although trade unions brought policies which the owners and managers were not happy about, their complaint was not entirely accurate regarding the effect on productivity.

Individuals should have the choice about whether to join a trade union – they should not be forced. However, trade unions say that without a closed shop it is more difficult to properly represent and defend the workers when there is an industrial dispute. Critics say it is all a question of power, i.e. trade unions, like any other group, like power and do not like to let it go.

Restrictive Practice – caregiving

Skills for Care, a British organization that focuses on creating a better-led, skilled and valued adult social care workforce, uses the term ‘restrictive practice’ with a very different meaning from those explained in the previous paragraphs.

Caregivers (UK: carers) need to be aware that people with different conditions and in a range of settings may need care and support that involves both positive-behavior support, and some form of intervention or restrictive practice.

In a caregiving scenario, restrictive practice refers to the possible use of physical restraint, devices, seclusion, medication, etc.

Regarding restrictive practice, Skills for Care says:

“Any restrictive intervention must be legally and ethically justified. It must be absolutely necessary to prevent serious harm and it must be the least restrictive option.”

“Workers should always aim to meet an individual’s needs with dignity and respect in a way that minimizes the risk of harm to the person being supported and the person implementing the intervention.”

Internationally, the approach to restrictive practices varies, with different countries adopting diverse regulations that reflect their unique legal and ethical standards.

Video – What is Restrictive Practice?

This educational video, from our sister channel on YouTube – Marketing Business Network, explains what a ‘Restrictive Practice(s)’ is using simple and easy-to-understand language and examples.