Watertight contracts and recruitment law advice from experts who understand recruitment inside out
As a recruitment startup, you’re facing quite enough challenges. Recruitment contracts shouldn’t be one of them.
Because here’s the thing:
It’s the contract which gets you paid. That’s why we provide you with robust, watertight recruitment contracts for any kind of placement known to man. They are an impenetrable safeguard for your business and, importantly, your bottom line.
To make things easier for you, we’ve developed Proterms, an interactive dashboard which creates and issues contracts, with no need for e-signatures.
This online platform is specifically designed for recruiters. Proterms speeds up the placement process, provides robust protection against client disputes, and it gets you paid.
As well as contracts, we provide recruitment law advice specifically for startups like yours. In a notoriously competitive business landscape, knowledge is power. It’s the difference between success and failure.
For example, we can:
You’re probably wondering about the cost. For a ridiculously small monthly fee of £80, you have all the contracts you need, plus guidance from legal experts who know your sector inside out.
At Lawspeed, we’ve worked exclusively with your sector since 1997, helping tiny startups develop into full-sized successful companies with healthy balance sheets.
Your new recruitment business offers potentially large rewards, but it’s easy to make expensive mistakes. Why risk learning the hard way? We help you get it right from day one.
If your question doesn’t appear, please feel free to get in touch. We’ll happily provide the answer.
Recruitment in the UK is governed by regulations that use specific terminology to describe typical types of business. A brief description is as follows.
An ‘agency’ is where you introduce an individual who contracts directly with the client, for example as in an employment contract.
An ‘employment business’ is where you introduce and supply a candidate to a client. There is no direct contract between the candidate and the client. Instead there are two contracts, one between you and the client and the other between you and the candidate who is an agency worker or could be a contractor.
An ‘agency worker’ is an individual who is supplied by you to a client where your function is as an employment business.
A ‘contractor’. This is a general term not used in regulation. It is used to refer to an individual operating through a company.
‘Conduct Regulations’. Again a general expression, which is used to refer to the Conduct of Employment Agencies and Employment Businesses Regulations 2003. These are sometimes also referred to as the Agency Regulations, the Agency Conduct Regulations or the EAA Regulations. These regulations and the Employment Agencies Act 1973 contain the rules for running an Agency or Employment Business. How to operate under these regulations is set out in our manual, “The Recruiter’s Bible – a manual on the EAA Conduct Regulations” – please ask us.
‘Work-seeker’. This is the technical term used in the Conduct Regulations to refer to an individual looking for work – your candidate.
‘Agency Worker Regulations’. These are rules that entitle agency workers to certain comparable pay and working conditions as other workers already hired by a client.
‘IR35’. This is the general non technical name that refers to tax rules relating to contractor pay. The name refers to Inland Revenue Notice 35 which announced the rules in year 2000. These specific tax rules apply when you supply a contractor to a client, and can affect how you pay the contractor.
‘Opt-out’. The Conduct Regulations can be disapplied by an individual operating through a company (except in certain sectors) by providing a written agreement. This agreement is known as an Opt Out. Withdrawing that agreement is known as opting in. There are rules that apply for the opt out to be effective.
‘Agency Tax Rules’. This is the general non technical name for tax rules that you must consider whenever you supply anyone to a client. They affect how you pay someone who is being supplied.
‘Umbrella company’. This is the general non technical name given to businesses that employ and payroll agency workers who are being supplied.
‘Service Provider’. Another non technical name used to refer to any business that contractually sits between you and an agency worker who is being supplied.
‘Contingency recruitment’. This is where you are hired by a client to fill a vacant position.
‘Contract of service’. This is reference to an employment contract.
‘Contract for services'. This refers to any other kind of engagement contract (i.e. not an employment contract) of a worker or business.
‘RPO’. This acronym stands for Recruitment Process Outsourcing and refers to business that work for hirers to engage recruitment businesses to find contractors or staff. They are sometimes also referred to as ‘vendors’.
‘Back door hire’. Where you have introduced a candidate to a client and the client then conceals the hire of the candidate from you so avoiding payment of your fee. Here it is critical that your terms of business are in place and cover all the potential circumstances when this could arise.
‘Temp to perm’. When a temporary worker you have supplied to a client becomes permanently employed by the same client. This would normally entitle you to a transfer fee.
‘Transfer Fee’. The fee you should be entitled to if the Client takes your candidate after having hired the candidate temporarily. There are regulations relating to entitlement and it is important that your terms of business address this to ensure you get your fee.
‘KID'. Stands for Key Information Document, which is the document you must provide to a temporary candidate that spells out how payment to the candidate will be made. This should be given to the candidate before you provide any services as such, sometimes quite difficult to do, but failure to comply with this is a regulatory breach and is the No.1 failure that the EAS finds on its inspections of recruitment agencies.
Every business should have its own terms rather than rely upon terms copied from somewhere else. This is to ensure that your mode of operation is properly reflected, all risks are covered off and very importantly your fees are protected!
You should have business terms with both your clients and your candidates. Depending on your business model the client terms can be for your services as an “agency”, where your candidate contracts directly with the client (for example as in an employment contract), or for the supply of agency workers or contractors where you act as an “employment business”. Where you operate both services, it can be advantageous to have the terms combined as provided for by Lawspeed.
See more on Lawspeed terms here.
A document outlining payment and engagement details for agency workers — required before an assignment starts.
