In the normal course of events, candidates are introduced, engaged and fees are paid without issue. But disputes can, and do, arise. What are the common reasons fees are lost and how can you protect your business?
Disputes and lost fees arise for two main reasons, which are within a recruiter’s own control
No terms in place
Whilst this may seem obvious, if there are no terms, there may be no fee. You may have a set of terms which offers a high level of protection, but if they were never issued, or there is no evidence of issue, these will not be very helpful. You can’t expect to get very far arguing that a fee is due under terms that a client has never seen or had access to.
Terms not agreed
Even where you can demonstrate that terms have been issued if they have not been clearly agreed upon, a client can argue they were never in place. Problems commonly arise when a signature is required but never received, or the terms include a trigger action or deemed acceptance but it is ineffective, too late in the process, or there is no evidence that terms were issued. There are steps that you can take to make that an easier task. These include making sure that acceptance provisions are contained within the terms, that trigger actions are at the right time and sufficiently protective to amount to acceptance. You can also use systems to help manage, track and evidence acceptance, avoiding the need for a signature at all.
Ineffective Terms
But what about the terms themselves, as getting them in place and agreed is only the first step. Do they cover you for a fee? This will depend upon the circumstances. Most terms will cover perm employment in the vacancy for which the candidate was introduced, but these fees are rarely the subject of disputes. It is the other types of engagement that usually present most issues, such as third-party hires and engagements in other capacities, or roles. Other issues can include time scales, client prior knowledge of a candidate, or where the client argues that it was not your introduction that led to the engagement. Additional issues may arise if the terms could potentially present the client with other compliance arguments against payment of a fee, such as the recruiter being in breach of contract. These should all be issues that your terms of business comprehensively address.
Best practice
So how do you get these matters right? Simple, rely on experts, who know the market, have seen the type of disputes that arise, and can therefore proactively protect you against the common scenarios.
Let’s face it, spending money on contracts may not seem the most exciting purchase, or even something that you may get a great deal of enjoyment out of. However, a bit like insurance, they may prevent you from missing out. Many a time we have heard people say that they have been in business for years, done things on a handshake and never needed to rely on terms, but it’s only when you need the terms that the value becomes apparent. The cost of a good set of terms is almost always less than one fee gained.
For more information on any recruitment or employment law matter, please contact us on 01273 236 236 or email us at info@lawspeed.com.
