Recruitment agency terms of business: the clauses that decide fee disputes, and how to prove the client accepted them

"Recruitment agency terms of business template" is typed by every new agency in its first month, and most templates have the same twenty clauses. Only a handful ever matter, and they matter in a fixed order. This guide takes them in that order, so the owner knows which clauses to fight for and which to leave to the solicitor.

1. Proof of acceptance

Nothing else in the document does anything unless the client accepted it. The Conduct Regulations once required an employment business to agree terms with the hirer before providing a service, but that rule, regulation 17, was removed on 8 May 2016. The reason to get terms accepted before the first CV goes out is now commercial: sending a CV first and the terms afterwards leaves you arguing for a fee nobody agreed to.

The mechanisms, strongest first: a signature or a click-to-accept with a timestamp; a reply email saying "agreed"; terms attached to the first CV with a line saying that interviewing the candidate constitutes acceptance, which courts have accepted where the client clearly saw them and acted; terms on the website that the client was never shown, which is nothing. Get the signature. If you cannot, get the email. Never rely on the website.

2. What an introduction is

The fee is for an introduction, so the definition decides whether one happened. The usual form: the agency has introduced a candidate when it has supplied the candidate's details, by any means, to the client or anyone in the client's group. Two protections belong here: that an introduction counts whether or not the candidate's details were already held by the client unless the client says so in writing within a set number of days of receiving them; and that it counts whether the client engages the candidate for the role submitted or another one.

3. What an engagement is

Employment, a contract for services, through a third party, in any capacity, by the client or any associated company. A client who takes the candidate on as a contractor through their own umbrella is an engagement. One who passes the CV to a sister company is an engagement. The clause lists them so there is nothing to argue about.

4. The introduction period

The fee is due if an engagement follows within a period of the introduction, typically twelve months. Shorter periods lose fees to candidates who are "re-found" on LinkedIn ten months later; longer ones are harder to defend.

5. The fee and when it is due

Percentage of first-year remuneration, with remuneration defined (basic salary plus guaranteed bonuses, car allowance, and what else), and what happens when the salary is not disclosed (a deemed figure). Payment terms in days from invoice; the invoice raised on acceptance of offer or on start, which the terms must say.

6. The rebate and its conditions

A sliding scale by week of leaving, with the exact scale written out (the fee and rebate calculator prints it with dates). The conditions that make it work: the invoice was paid within terms, the client told you in writing within seven days of the candidate leaving, and the leaving was not redundancy, restructure or a change to the role. Whether you offer a rebate or a free replacement is commercial; which you offer must be in the clause.

7. Temp-to-perm

Regulation 10 is the one statutory fee rule: a transfer fee only within the later of eight weeks after the assignment ends and fourteen weeks after it starts, and only if the terms offer the hirer an extended period of hire instead. A clause that claims a fee outside that window is void, and so is one that omits the extended-hire choice. The transfer fee guide sets the clause out.

8. Data protection roles

Who is controller of candidate data, for what, and what the client may do with a CV it did not engage. Under the ICO's reading of AI in recruitment, "we are just a processor" is usually wrong for an agency, and the terms should not say it.

What almost never decides anything

Confidentiality, limitation of liability, governing law, force majeure. Keep them; let the solicitor write them; do not spend the client meeting on them.

An AI Compliance Clerk set up by Overlyft checks every new client record for signed terms before the first CV goes out and flags the ones that have not come back, which is where most lost fees start. This is general information, not legal advice; have a solicitor draft the terms you sign.