With over 25 years of experience in the industry, we have come across a barrage of reasons for fees being disputed. Here are our top 5 tips to reduce the risk of fees being lost or disputed.
1. Get your standard terms in place
If a candidate is introduced or supplied without terms being agreed, then there will be no, or very limited, fee protection. So, ensuring that you can evidence your terms being accepted is essential. This can be via a signature, or other forms of express acceptance, such as email or digital confirmation. However, having terms that provide for other methods of acceptance, such as through trigger actions based upon the hirer’s actions after receiving the terms can, in practice, often be more effective.
Our tip – make sure that you can evidence that your terms have been issued and have an effective trigger action. This should be early enough in the process to offer protection, normally before a candidate is introduced, and not for example, at the point of interview. If you like a signature but want a trigger action as a fallback position, have the wording checked to ensure that the two do not conflict, and don’t simply attach a signature section without appropriate wording to accompany it.
2. Make sure that your standard terms offer you enough protection
This sounds simple, but outside of terms not being in place, disputed fees often come down to the content of the terms. Common arguments from hirers include a candidate not being employed, being taken on in an alternative position or via a third party, having applied directly or being introduced by someone else. Hirers may argue that a candidate you introduce was already known to them, although in a social media age ‘prior knowledge’ can be a wide concept. Having short terms may be welcomed by hirers, but that is little comfort if the lack of detail results in lost fees.
Our tip – have your terms reviewed and strengthened to ensure they cover and protect you from foreseeable eventualities. Use industry experts who know the various scenarios that could arise, to ensure maximum commercial protection and allow you to claim your fee in the widest set of circumstances.
3. Check Hirer/RPO terms and where possible negotiate
Whilst using your own standard terms is great, we all know that this is not always possible. This is particularly true with larger clients and where RPOs are involved. Hirer and RPO terms will be drafted in the Hirer and RPO’s favour. This may mean fees are less protected and there may be additional compliance steps, whether that is evidencing a right to represent, introducing the use of specific forms or processes or abiding by particular time frames.
Our tip – get the terms reviewed. Some Hirers/RPOs will be open to reasonable negotiation. For example, if fees are only due for perm employment, it may be sensible to extend this to cover other types of engagement. If there is no scope for amendments, then understanding your risks, and additional steps or processes can be essential to protecting your fees.
4. Operate compliantly
We know most agencies strive to operate in a fully compliant manner, but sometimes in the ever-changing world of rules and regulations, some things can fall through the cracks. Failure to comply with the rules, such as the Conduct Regulations can lead to a loss of fees. Non-compliance would potentially place you in breach of contract and weaken your negotiating position. A business that is worried that enforcing a fee might lead to a complaint to HMRC or EAS, may be less inclined to pursue. Don’t provide your hirer with the ammunition to dispute your claim.
Our tip – having adequate training, strict processes and systems in place is the best way to ensure you are operating in a compliant manner. Make sure that your staff are trained in compliance and always kept up to date.
5. Understand the strengths and weaknesses of your position
In any dispute understanding how strong your claim is, and potential risk areas is essential. This will enable you to present an argument to the hirer as to why a fee is payable and address any objections to increase the chances of early resolution. Equally, understanding weaknesses may help determine whether you pursue the matter, your negotiating position, and if the position is weak, potentially avoiding unnecessary damage to a hirer relationship.
Our tip – get early advice from trusted industry experts, who understand the scenarios and terms and can provide an initial view quickly and efficiently.
Lawspeed can support recruitment businesses in a range of ways to ensure maximum fee protection. We offer training and auditing to give you peace of mind, as well as fixed-price services including legal helpdesk, fee recovery and contract reviews.
For more information on reducing the risk of lost fees, fee disputes or rapid advice on any recruitment or employment law matter, please contact us on 01273 236 236 or email us at info@lawspeed.com.
