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Do you still need to agree terms with an Employment Business or Agency before services are provided?

The Conduct of Employment Agencies and Employment Businesses Regulations 2003 were put in place to regulate the recruitment agency industry offering a framework for agencies, work seekers and hirers to adhere to. There have been various amendments to these Regulations with the latest coming into force on 8 May 2016.

The latest amendments see the removal of Regulation 17 which previously placed an obligation on an employment business to agree terms with the hirer before providing any services. This included the details of fees to be charged, when rebates/refunds would apply and the procedure to follow if a candidate proved unsuccessful. The reason given for the removal of Regulation 17 is to give the employment business/hirer relationship more flexibility when agreeing terms.

Whilst this may afford the parties some flexibility if the terms of the contract are not clearly set out or agreed before any services are provided it does give rise to potential confusion over what has been agreed between the parties and what the terms of the contract are.

It also does not assist with some of the obligations placed on employment businesses under the Regulations. For example the Regulations impose a strict definition of what must be set out in a contract to enable an employment business to recover a transfer fee. If these provisions are not complied with then any transfer fee is unenforceable. Therefore, it is difficult to see how the removal of the obligation to agree terms prior to services being provided assists here.

Although there may no longer be an obligation to agree terms before services are provided, as with all agreements, it is prudent that the parties agree terms before undertaking any work to provide certainty to the relationship and in an attempt to avoid avenues for dispute.

Failure to agree the terms prior to any services being provided may give rise to arguments that any terms are not incorporated into the arrangement between the parties and leave open the door for a challenge on any fees.

For more information and advice contact Marion Meager onĀ 0113 2206344.

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Marion Meager


Marion specialises in internet disputes, defamation/social media claims, commercial agent disputes,…

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