Terms of business for a recruitment agency (permanent placements)

A recruitment agency's fee depends on proving that its introduction caused a hire, months after the CV was sent, to a client who may have met the candidate elsewhere. The terms of business have to define an introduction, fix when a fee is triggered, run the rebate scale, comply with the regulations that govern agencies, and be agreed before the first CV is sent. I draft those terms for a fixed fee of £995, delivered in five working days.

Who this is for

Recruitment agencies and consultants in England and Wales introducing candidates to client businesses for permanent and fixed-term employment, from a sole recruiter to a multi-desk agency. These are the terms of business with the client; supplying temporary workers is a different arrangement with its own terms.

What matters in permanent recruitment terms

Agreeing the terms before the introduction

The Conduct of Employment Agencies and Employment Businesses Regulations 2003 and the Employment Agencies Act 1973 govern how agencies operate. The former statutory requirement to agree terms with the client before providing services was removed in 2016, which makes the agency's own incorporation of its terms more important rather than less, because nothing else supplies them. The terms of business should be sent and accepted before any candidate is introduced, and the terms should say that a client who interviews or engages a candidate introduced by the agency accepts them. A CV sent before the terms are agreed is the most common cause of an unpaid fee.

What an introduction is and when a fee is due

The terms should define an introduction as the provision of a candidate's details, in any form, by the agency, and say that a fee is payable where the client, or any associated company, engages that candidate in any capacity within a stated period after the introduction, whether or not the client claims to have known the candidate already or received the details elsewhere, unless the client proves it had received the details from another source first and told the agency in writing at the time.

Fees, rebates and replacements

The fee is a percentage of the candidate's first-year remuneration, and the terms should define remuneration (salary, guaranteed bonuses, allowances, car or its value) and say that the fee is invoiced on the candidate's acceptance or start date. A rebate scale where the candidate leaves in the early weeks should be stated, conditional on the client having paid the fee on time, notified the agency promptly and not having dismissed for redundancy or its own breach; a free replacement search is the alternative the terms can offer.

Candidate information, references and the client's decisions

The agency takes reasonable steps to confirm a candidate's identity, experience and right to work as the regulations require, but the terms should say that the client is responsible for its own final checks, references, qualifications, medical and right-to-work verification, since the civil penalty for employing someone without the right to work falls on the employer under section 15 of the Immigration, Asylum and Nationality Act 2006, and for its decision to hire, and that the agency is not liable for a candidate's acts or omissions once engaged. Candidate data is shared under the UK GDPR and the Data Protection Act 2018 for the recruitment purpose only, and the terms should prohibit the client passing it on.

Payment, confidentiality and liability

Fees are payable within a stated period with interest and fixed compensation on late payment under the Late Payment of Commercial Debts (Interest) Act 1998; a rebate is forfeited where the fee was paid late. The terms should keep candidate details confidential to the client, prohibit passing them to third parties, and make a fee payable if a third party engages a candidate as a result. Liability should be capped at the fee for the relevant introduction, with consequential loss excluded, tested for reasonableness under the Unfair Contract Terms Act 1977.

What it costs

Customer or supplier terms and conditions, £995. One set of terms, customer-facing or supplier-facing, drafted for your business. Five working days.

Review of your existing terms, £495. You already have terms and want them checked and brought up to date. Returned marked up with my amendments and an explanation of the changes. Three working days.

Buying online forms the engagement on payment. The scope is what the terms and conditions drafting page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• A full set of bespoke terms drafted for your business, reflecting the legal requirements that apply to your business and sector
• A note in plain English explaining the terms I have drafted for you
• Liability, payment, termination and IP provisions that protect your position and are drafted to withstand scrutiny from the other side
• Guidance on how to incorporate the terms properly
• Your questions and comments answered by email or phone
• One round of amendments to finalise the terms ready for use

What is not included

• Negotiating your terms with individual customers (I am happy to quote for this as an additional service if required)
• Sector-specific regulatory compliance beyond the contract terms themselves
• Website privacy notice and cookie compliance, which I quote separately
• Terms governed by the law of another country
• Tax advice

Questions I am often asked

The client says they already knew the candidate and will not pay. Where do we stand?

If the terms say a fee is payable on engagement within the stated period after an introduction unless the client proves prior receipt from another source and notified the agency at the time, the fee is due. The introduction record with its date is the evidence.

The candidate left after seven weeks. Do we have to refund?

The rebate scale in the terms applies, and only if the conditions are met: fee paid on time, prompt notice of the departure, and the candidate not dismissed for redundancy or the client's breach. A replacement search is the alternative the terms can offer instead.

The client passed our candidate's CV to their sister company, which hired them. Can we charge?

If the terms define engagement to include associated companies and third parties to whom the client passes the candidate's details, a fee is payable by the client. That clause is what protects introductions.

Related guidance and services

• Terms and conditions drafting, £995, the service this page describes
• Contract review, £495
• Terms of business for a recruitment agency (temporary workers)

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.