A recruitment agency terms of business will set out the terms on which the agency will place candidates with the client and define the legal relationship between the agency and the client. This article will explore 3 of the key clauses to include in a recruitment agency terms of business.
1. Fees and Rebate
One of the key clauses to include in the recruitment agency terms of business is the fees and rebate clause. A recruitment agency is paid for placing candidates if they are employed by the client. Usually, the payment is a percentage of the annual income of the candidate. Accordingly, the clause would state the percentage to be paid to the agency. It would also state whether the percentage is calculated according to the basic salary of the candidate or if it would be calculated according to the total remuneration including bonuses and benefits. Additionally, since the agency is paid on the basis of successful candidates, if the candidate leaves within a set period of time, the rebate clause would indicate the percentage of the fee which would be refunded to the client or whether the agency is allowed to find suitable replacement candidates.
2. Obligations of each party
Another key clause to include in the recruitment agency terms of business is obligations. Since the terms of business regulates the relationship between the parties, setting clear obligations can decrease the likelihood of conflicts in the future. On the agency’s side, obligations could include the minimum number of candidates to be introduced for each vacancy and using reasonable endeavours to ensure that the information on candidates which is provided to the client is accurate and up to date. On the client’s side, obligations can include satisfying itself as to the suitability of the candidate, obtaining the necessary right to work permits and carrying out all the necessary checks for the vacancy. It could also include providing all the necessary information to enable the agent to find suitable candidates such as the information on client’s business, the job title and description for the positions they are hiring for as well as desired qualifications and start dates.
3. Data protection
Given that the recruitment process involves the handling of personal data, it is important to include a data protection clause in a recruitment agency terms of business agreement. The data protection clause should indicate whether each party is a data controller or a data processor in accordance with the data protection legislation. The clause should also prescribe the process if a data breach is discovered by the client. Additionally, the clause should determine whether the client would indemnify the agency in the case of a claim against the agency for a data breach by the client. Finally, the data protection clause should state the purposes for which data processing is permitted.
In conclusion, the recruitment agency terms of business agreement regulates the relationship between the client and the agency and provides clarity as to the obligations of each party. Some of the key clauses that are found in a recruitment agency terms of business agreement are fees and rebates, obligations and data protections. Other clause that could be found include exclusivity, non-solicitation and anti-discrimination.
