The importance of contractual terms for the recruitment sector
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The importance of contractual terms for the recruitment sector
Terms and conditions are often one of the most neglected areas of a company’s operational ambit. At best, they receive a cursory glance. At worst, they are totally ignored. This is not a shameless plug to instruct lawyers but a necessary reminder to dust off your off-line and online terms, particularly if you are in the recruitment sector. It’s not that the recruitment sector gets it any more wrong than any other sector but rather it remains crucially important to have an effective back stop when things go awry.
Below are a few tips on what to look out for or remind yourself of when reviewing existing terms or contemplating a wholesale revision.
- Is there a clear description of the services to be provided and who is responsible for the different parts of the contract?
- Are the applicable transfer fees (temp to perm), refund provisions and payment terms clear? Many recruiters’ terms of business are confusing in these areas.
- Do your terms give you a right to review pricing in light of changes in the law, e.g. the new rules on auto-enrolment?
- Does the contract limit your maximum financial exposure for any liability or your indemnity under the contract?
- Have you excluded your liability for consequential and indirect losses suffered by your client?
- Do you assume liability only for matters within your control and exclude liability for the actions or omissions of temporary workers, whilst they are working under the supervision, direction and control of your client?
- Do your terms allow you to recover any additional costs and expenses (such as legal fees) when seeking to enforce your rights or recover any outstanding sum due under the contract with your client?
- Do your terms require your client to comply with the Agency Worker Regulations and provide information to you upon request?
- Is your client required to give you information about vacancies in line with the The Conduct of Employment Agencies and Employment Businesses Regulations 2003?
- Lastly do you have proper compliance processes in place to ensure your terms are effectively incorporated into the contract between you and your client, before providing candidate information to a client? Failure to incorporate effectively is one of the biggest pitfalls you could make.
It is difficult in any blog post to effectively cover all of the traps and nuances in this area. This is not us ducking the issue but rather every business will be slightly different and therefore providing a universal set of terms is difficult. If this has caused you to think then perhaps now is a good time to review your terms then the above guide should hopefully provide a useful starting point.