Construction Recruitment Terms of Business UK | Trades and Labour Agency Contract
Construction recruitment agencies face a specific problem that generic terms of business fail to address: the rapid, shift-by-shift placement of trades and labour workers creates serious exposure around pay obligations, site liability, and whether workers are employed, self-employed, or engaged through a limited company. Without a properly drafted terms of business contract, disputes over unpaid fees, wrongful termination of assignments, or a client's failure to acknowledge their off-payroll obligations under the Construction Industry Scheme can leave agencies significantly out of pocket. UK agencies operating under the Conduct of Employment Agencies and Employment Businesses Regulations 2003 must also ensure their terms are compliant before any worker is placed. The Late Payment of Commercial Debts Act 1998 further protects unpaid invoices but only applies when the right contractual foundation exists. Generate your construction recruitment terms of business now.
Generate your Contract free →Enter your details below — see your contract update in real time
Get the full Contract
Complete AI generation with all clauses — jurisdiction-aware, ready to sign
Key clauses in a Contract
Fee Structure and Payment Terms
This clause defines the agency's fee entitlement, the payment trigger, and the invoice payment window, typically 14 to 30 days. Without it, agencies risk falling outside the statutory interest and debt recovery provisions of the Late Payment of Commercial Debts Act 1998, which requires a qualifying contract to be in place before the 8% above base rate interest remedy applies.
Construction Industry Scheme Responsibilities
This clause allocates responsibility between the agency and the hiring client for CIS registration, deduction obligations, and verification of subcontractor status under HMRC's Construction Industry Scheme. Misallocating these obligations can result in the agency being held liable for deductions that should have been made by the client, creating significant HMRC compliance risk.
Temp-to-Perm Transfer Fee
This clause governs what happens when a client directly engages or re-engages a worker introduced by the agency, triggering a transfer fee or an extended hire period in lieu of payment. Under the Conduct of Employment Agencies and Employment Businesses Regulations 2003, agencies must provide clients with a lawful option to extend the hiring period rather than simply imposing a transfer fee with no alternative.
Generate your Contract in 2 minutes
AI-powered. Jurisdiction-aware. No account required for your first contract.
Generate free →Frequently asked questions
Do construction recruitment terms of business need to comply with the Conduct Regulations?
Yes. The Conduct of Employment Agencies and Employment Businesses Regulations 2003 apply to most construction labour placements and set out mandatory requirements including written terms before work commences, fee transparency, and rules on transfer charges. Failure to comply can make specific clauses unenforceable and expose the agency to regulatory action from the Employment Agency Standards Inspectorate.
Who is responsible for CIS deductions when a recruitment agency places a trades worker?
Responsibility depends on the contractual chain. Where the agency pays the worker directly, the agency is typically the deemed contractor and must verify the worker with HMRC and apply the correct CIS deduction rate. Where the client pays the worker directly and the agency merely introduces, the client takes on the deemed contractor role. The terms of business should explicitly state which arrangement applies to avoid liability disputes.
Can a construction recruitment agency charge a fee if a client hires a worker directly after the placement ends?
Yes, but the terms must be drafted correctly to enforce it. Under Regulation 10 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003, an agency can charge a transfer fee only if the terms were agreed in writing before the introduction and the client was given a genuine option to extend the hire period as an alternative. A fee clause that offers no such alternative is unenforceable.
The information on this page is for general informational purposes only and does not constitute legal advice. Contracto generates AI-assisted contract templates — they are not a substitute for advice from a qualified solicitor. For high-value or complex engagements, always seek independent legal review.