Reviewing recruitment agency terms of business before you hire

A recruitment agency's terms of business are sent with the first CV and treated as accepted when the employer interviews the candidate. They decide when a fee is payable, how much, whether it is refunded if the hire fails, and what the agency may charge if a candidate it introduced is engaged later, through another route or as a temporary worker who goes permanent. I review the terms from the employer's side and return them marked up with a written explanation of the changes and which ones an agency will accept, for a fixed fee of £495 in three working days.

Who this is for

Employers in England and Wales using a recruitment agency or an employment business for permanent hires, temporary workers or contractors, whether on the agency's standard terms or a preferred supplier agreement, and want to know what triggers a fee and what protection the Conduct Regulations give them. The employer and the agency are businesses; the Regulations protect the work-seeker and set rules the hirer can rely on.

What to look for in recruitment agency terms of business

Incorporation: when you became bound

Agency terms say they are accepted when the employer receives a CV, interviews a candidate or engages one, and disputes arise when two agencies introduce the same person. The review checks how the terms are said to be incorporated, and asks for a rule that the introducing agency is the one whose introduction the employer accepted in writing, that an introduction lapses after a stated period, and that a candidate already known to the employer or already introduced by another agency does not trigger a fee.

The fee, the trigger and the rebate

The fee is a percentage of the first year's remuneration, and the terms may define remuneration widely, treat an engagement in any capacity as a placement, and pay a rebate only if the candidate leaves within a short period and the employer has paid on time and notified within days. The review asks for remuneration to be defined as basic salary, for the rebate to be a refund on a sliding scale rather than a credit against future placements, for the rebate to survive a late payment, and for the Late Payment of Commercial Debts (Interest) Act 1998 interest term to be a substantial remedy rather than a penalty.

Temporary workers, temp-to-perm and transfer fees

Where the agency supplies temporary workers, regulation 10 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 restricts the transfer fee the agency may charge if the employer engages the worker directly or through another agency: the agency must offer the employer the choice of an extended hire period at the end of which no fee is payable, and may charge a transfer fee only within the periods the regulation sets. The review checks the terms against the regulation and marks up any transfer fee or restriction that goes beyond it. A temporary worker gains equal treatment on basic terms after 12 weeks under regulation 5 of the Agency Workers Regulations 2010, and the terms should say who bears the cost.

The checks the agency must make and the information it must give

Under regulation 19 of the Conduct Regulations an agency must obtain confirmation of qualifications where the law requires them for the work, under regulation 20 it must take steps to ensure the worker is suitable, and under regulation 21 it must give the hirer the information it has obtained about identity, experience, qualifications and any authorisation the work requires. The review checks that the terms do not disclaim those duties, and that the agency warrants the checks it says it has made, including right to work checks where it is the employer of a temporary worker. For a permanent hire the employer carries the civil penalty risk under section 15 of the Immigration, Asylum and Nationality Act 2006 and must do its own check.

Discrimination, fees to candidates and data

An agency must not discriminate in the services it provides under section 55 of the Equality Act 2010, and an employer that gives a discriminatory instruction is liable too, so the review checks the terms for an obligation on both sides to comply. Under section 6 of the Employment Agencies Act 1973 the agency may not charge the candidate a fee for finding work. Candidate data passes between the parties as controller to controller, and the terms should allocate responsibility under the UK GDPR and the Data Protection Act 2018 for privacy information, retention and requests.

Liability, exclusivity and the preferred supplier agreement

Agency terms exclude liability for the candidate's acts, for loss caused by an unsuitable placement and for delay in supplying a temp. The review checks that the exclusions do not remove liability for the agency's own failure to carry out the checks it warrants, that the employer is not bound to exclusivity or a minimum volume, and, where the employer signs a preferred supplier agreement, that it sets fee percentages, rebate terms and service levels that override the agency's standard terms for every introduction.

What it costs

Standard review, £495. Marked-up document and a written explanation of the changes. Three working days.

Buying online forms the engagement on payment. The scope is what the contract review 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

• Your own contract returned with my amendments as tracked changes, plus a clean version with every change accepted, ready to send to the other side
• Comments in the document where a point needs explaining
• A written explanation of what I have changed and why, by email or as an attachment if it is lengthy, marking the points I would hold firm on and the ones that are negotiable
• A view on what is normal market practice and what is the other side pushing their luck
• One round of follow-up questions by email, included

What is not included

• Negotiating directly with the other side, which I quote separately once I know who is on the other side. Where the other side is willing to share a live document, I can work in that document directly
• Drafting a replacement contract from scratch
• Advice on the law of any jurisdiction other than England and Wales
• Tax, accounting or regulatory advice
• Disputes about a contract that is already signed

Questions I am often asked

Two agencies sent us the same candidate. Do we pay both?

That depends on whose terms apply and how each defines an introduction, and both will claim the fee. The review asks for an introduction to be effective only when you accept it in writing, for the first accepted introduction to prevail, and for a candidate already introduced or known to you to be excluded.

Our temp wants to join us permanently. What can the agency charge?

A transfer fee, but only within the limits in regulation 10 of the Conduct Regulations, and only if it offered you the alternative of an extended hire period at the end of which no fee is due. The review checks the terms against the regulation and marks up any fee or restriction that goes beyond it.

The candidate left after six weeks. Do we get the fee back?

Only on the rebate terms you agreed, which may require payment on time and notice within days, and may offer a credit rather than a refund. The review asks for a sliding-scale refund that does not depend on those conditions and applies whether the candidate resigns or is dismissed.

Related guidance and services

• Contract review, £495, the service this page describes
• Employment contracts and handbooks, £595
• Reviewing an umbrella company or agency contract as a contractor

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.