Recruitment Agency Fees - are employees liable? - The HR Forum

Recruitment Agency Fees - are employees liable?

Posted by Jane Madden on January 21, 2015 at 1:05pm in HR Policy

Hi All,

There is a clause in our Offer of Employment letter that states if an employee leaves our organisation within the first 12 months of employment as a result of misconduct, poor performance or resignation then the organisation will recoup the fee from the employee on a sliding scale. I was just wondering what people's opinions are on this clause and whether they have come across it before?

Jane

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Replies

Marco Capelli January 25, 2015 at 7:48pm

Hi Jane,I work for an EPC company and we have a lot of recruitment with agencies when we start a new site. I use to split/postpone as much as possible the payment of the fee, and then I try to obtain a replacement fee for special cases. In my opinion it depends a lot from the number of candidates you recruit with each agency, if you have good numbers they will always work to find a good solution for a good client.

Hope that helps

Marco
Joanna Oakley January 21, 2015 at 2:31pm

Hi Jane,

I have come across it before (just the once) and I believe there was a recent case law regarding a similar matter. Take a look at Cleeve Link Ltd v Bryla

It's not very common in my experience because it puts off a lot of candidates (just because it's not a common practice and they usually need to seek legal advise) and you do have to be careful that the amont being clawed back is not seen as a penalty or the amount is too high and therefore would restrict the employees ability to change jobs during that period if they needed to.

Like Jacqui clawing back training costs is much more usual.

Hope that helps.

Joanna
- Jane Madden > Joanna Oakley January 23, 2015 at 1:28pm
  
  Hi Joanna,
  
  Thanks for your message.
  
  I agree that this clause is putting candidates off joining us however I also understand that from the organisations perspective they are trying to protect themselves. I will take a look at the case law you suggested.
  
  Many Thanks,
  
  Jane
Jacqueline Black January 21, 2015 at 1:32pm

Hi Jane

not come across this before only for training requirements as really the fee would need to be in some way re-couped from the agency . The best way I have found is to negotiate terms with the agency on a sliding scale and perhaps get a free replacement from the agency if they dont work out, but i have found they limit this to 6 months . hope that helps

jacqui
- Jane Madden > Jacqueline Black January 23, 2015 at 1:19pm
  
  Hi Jacqueline,
  
  Thanks for your message.
  
  My organisation is an SME so recruitment agency fees are a major cost for us. Therefore from a financial perspective I fully understand why we have this clause however it isn't sending the best message to the individuals we are trying to recruit. I will look into negotiating our terms with the recruitment agencies for any future recruitment.
  
  Jane
  - Jacqueline Black > Jane Madden January 25, 2015 at 12:13pm
    
    Hi Jane
    
    our company is also an SME , I was tasked when i joined as we were quite a high agency user was to look at the fees. Most agencies will lower the fee to 10% or flat fee if they want to continue supplying our business, found that most of them negotiated , also found that if you have the resource in house , good idea is to join the cv database search on some internet sites as most the agencies we dealt with sourced the people from there as well so sometimes not all we managed to source ourselves . hope that helps
    
    jacqui