Recruitment Agency Terms of Business

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A recruitment agency terms of business agreement allows an agent to source candidates for a client and receive an introduction fee when the candidate is successfully engaged by the client. The agent’s fee can be a fixed fee or equivalent to a percentage of the candidate’s remuneration. Depending on the terms of business, the client might receive a full or partial refund of the agent’s fee if the candidate leaves or is dismissed within a certain period of working for the client.

What are the key terms of a recruitment agency terms of business agreement?

When creating a recruitment agency terms of business, it is important to ensure that the following key terms are properly defined in the agreement:

Engagement: this is the criteria for the agent to be paid so it is important that the conditions of the candidate being engaged are clear for both the agent and the client.

Data Protection: the agent and client will be processing sensitive data such as the candidate’s CVs so the data protection legislation, data controllers, and personal data need to be present and understood.

The remuneration of the candidate can be limited to their gross basic salary but in certain cases can include guaranteed or anticipated bonuses and benefits such as a company car. The agent can sometimes negotiate that their introduction fee is calculated based on the total value of the candidate’s package as opposed to just the gross basic salary. To avoid payment disputes, the definition of remuneration should state what it means.

What are the obligations of the recruitment agent?

The agent agrees to supply a certain number of candidates to the client for the requested vacancy. The agent must use reasonable endeavours to ensure that the information they provide to the client with regards to the candidate is accurate and up-to-date.

What are the obligations of the client?

The client is responsible for assessing the candidate’s suitability for the new job and must ensure the candidate has the right to work in the UK. If require, they will be responsible for the candidate’s work permit and visa. The client is also responsible for medical checks or security vetting if they require the candidate to go through these checks as a condition of employment.

If the client is introduced a candidate that they already know they must inform the agent within an agreed amount of time to ensure the client is not liable for an introduction fee should they proceed with that candidate.

The client also agrees to notify the agent when they make an offer to a candidate within an agreed amount of time. If the client makes a job offer to the candidate, the agent will usually share the offer and employment contract with the candidate directly.

Recruitment Fees, Charges and Rebates

The client must pay the agent the agreed recruitment fee if they engage a candidate introduced by the agent. A portion of the fee is usually paid when the vacancy is released, another portion when the candidate starts their job and the remainder after the candidate has completed their probationary period or an agreed period of time with the client.

The client must not share the details of any of the candidates with third parties and if they do, must pay the agent the introduction fee.

If the candidate ceases to be employed by the client within a certain period of time, the client can negotiate a full or partial reimbursement of the fees they paid the agent. The agent can also offer a replacement candidate at no additional cost to the client. Rebate periods can be a couple of weeks or a couple of months.

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What are confidentiality obligations in a recruitment agency terms of business?

The candidate’s information and any other confidential information must be kept secret and must not be disclosed to third parties. In certain circumstances, the client may disclose the candidate’s information with the agent’s consent.

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The Agent agrees not to approach, contact or deal with, whether directly or indirectly, any employee of the Client (including any Candidate who has accepted Permanent or Fixed-term Employment) in relation to any offer, proposal or service that may be considered to encourage the employee to consider other offers of employment unless the contact is within the prior written consent of the Client or has been initiated by the employee. The client and agent usually agree to a non-solicitation period of 12 months after which the agent can approach employees.

Management reporting

For the purposes of managing the relationship and resolving disputes, the agent must appoint a Key Contact and the client a Recruitment Manager. The Key Contact and Recruitment Manager will be responsible for communicating with each other on behalf of their employers and will be the points of contact for resolving disputes, for example of fees and payments.

What are the benefits of creating a recruitment agency terms of business agreement with Legislate?

Legislate’s recruitment agency terms of business agreement is written in plain English and contains all the clauses you need to introduce candidates to a client. The terms can be easily tailored to specific requirements by answering simple questions. The agent can choose if the terms of business are exclusive or not, the nature of the fees and how they are calculated. The termination requirements of the agreement can also be configured to meet the client or agent’s requirements. Some other benefits of using Legislate are:

  • Easily configure terms based on your specific needs
  • The agreement contains all the clauses which are legally required such as Rights of Third Parties and Conduct Regulations
  • Keep all your contracts in one place and understand the distribution of your average deal terms
  • Offer a more professional experience to your clients and candidates
  • Create all the legal documents you need to grow your business such as NDAs and employment agreements
  • Avoid contract drafting mistakes with Legislate

How to create a recruitment agency terms of business agreement with Legislate?

To create a recruitment agency terms of business with Legislate, simply create an account, select the contract from the list of available agreements and set the terms by answering questions. Watch a demo or read a tutorial to find out more.

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