Protecting against back door hires
The current lockdown has had an adverse effect on many recruitment business offering contingent perm services, with offers withdrawn and hiring processes stalled, but where do you stand if a candidate you have introduced is taken on by a hirer after lockdown without your involvement?
In most contracts entitlement to a fee will be dependent upon the time frame in which the engagement takes place, often referred to as the fee period or period of candidate ownership, but in some contracts entitlement to a fee can also depend upon whether your introduction was the effective cause of the engagement. Delays in hires caused by the lockdown may see engagements falling outside of the fee period provided for in agreed terms, and delays can often support an argument that an engagement has occurred for reasons other than your introduction. So what steps can you take to maximise your fee protection?
If you are working to a hirer’s terms which include strict time frames, hoping for some goodwill may be your only avenue. However, the position may be different if terms are less strict or you are operating on your own contracts. The first step will always be to understand your position, your entitlements and risks. This may help determine not only whether there is action that you can take, but also your priorities. The second step is to keep talking to your clients. It is obvious that keeping channels of communication open may keep you in the loop and your involvement at the forefront of everyone’s minds, therefore minimising the prospect of you being cut out of the picture. However, it also has another impact, in some cases, depending upon the terms in play, continued involvement and discussion may extend fee periods. Not all fee/ownership periods run from the date of an initial introduction, and a fee period may not always depend solely on time. Fee periods can in some circumstances be unlimited if your introduction is the effective cause of the engagement and ongoing communication and involvement can be relevant in evidencing this. Continued dialogue may also open up further opportunities and, in some instances, it may be appropriate to re-introduce a candidate, particularly if the introduction and fee protection is not vacancy specific.
Understanding your risk, options and potential for recovery is an essential step in what may be difficult times ahead. Lawspeed has over 22 years’ experience in drafting and reviewing contracts, we can advise on your fee protection, suggest amendments at the point of negotiation, assist in fee disputes and, if you are in a position to work on your own terms, can assist with terms which offer a high level of fee protection. Contact Lawspeed on 01273 236 236 or [email protected] for more information.
Author – Theresa Mimnagh
For more information or legal advice call Lawspeed on 01273 236236 or email [email protected].
Adrian, a highly experienced lawyer, founded Lawspeed in 1997. He is responsible for developing our extensive portfolio of products and services, including the widely used Lawspeed contract templates. Adrian is an expert on “recruitment law” and specialises in contracts, regulatory compliance, employment status and dispute handling. He is chair of the trade body the Association of Recruitment Consultancies, the only lawyer lead recruitment trade body in the UK. Adrian and his co-director Ravi devised Standards in Recruitment as a vehicle for helping drive up standards and compliance in the industry.
Adrian is our lead in discussions with the government over regulatory evolution. Apart from assisting with client support, Adrian’s primary role is research and development into methods of business delivery, our latest service Proterms being his most recent project. Adrian heads our IR35 lawyers team.