Contingency Recruitment Contract Template UK
Contingency recruitment contracts protect agencies and headhunters from the most common dispute in the industry: clients hiring candidates and refusing to pay the fee. Without a robust written agreement, UK recruitment businesses have limited legal recourse when placements go unpaid, particularly given the absence of specific statutory protection for recruitment fees. A well-drafted contingency recruitment contract establishes the fee structure, rebate periods, and replacement terms while incorporating protections under the Late Payment of Commercial Debts Act 1998, allowing agencies to claim statutory interest on overdue invoices. It also clarifies the exclusivity position, preventing clients from bypassing the agency by hiring candidates through alternative channels. Whether you operate as a sole trader recruiter or a limited company agency, having a legally sound contingency contract is essential to protecting your revenue. Generate yours now in minutes.
Generate your Recruiter Terms of Business free →Key clauses in a Recruiter Terms of Business
Fee Trigger and Payment Terms
This clause defines precisely when the recruitment fee becomes due, typically on the candidate's start date or acceptance of an offer, and sets the payment deadline. Incorporating the Late Payment of Commercial Debts Act 1998 entitles the agency to claim statutory interest at 8% above the Bank of England base rate on any overdue amounts, providing meaningful financial leverage against slow-paying clients.
Rebate and Guarantee Period
This clause specifies the circumstances under which the agency will offer a fee rebate or free replacement if the placed candidate leaves within an agreed period, typically 8 to 12 weeks. Clearly defining the rebate scale and the conditions that void the guarantee — such as the client changing the role or making the candidate redundant — protects the agency from unfair clawback demands under general contract law principles.
Candidate Ownership and Off-Limits
This clause establishes that any candidate introduced by the agency remains the agency's introduction for an agreed period, commonly 12 months, preventing the client from re-engaging that individual through another route to avoid paying a fee. Under UK common law, established cases such as Anglia Television Ltd v Reed confirm that the agency is entitled to claim losses arising from a client's deliberate circumvention of an agreed introduction.
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Generate free →Frequently asked questions
Can I charge a contingency recruitment fee if I only submitted a CV by email?
Yes, provided your terms of business were communicated to and accepted by the client before the introduction was made. UK courts have consistently held that sending terms alongside or prior to a CV submission, without objection from the client, can constitute acceptance. To avoid disputes, always obtain written confirmation of your terms before sharing any candidate details.
Does IR35 affect how I structure my contingency recruitment contract?
IR35, governed by Chapter 10 of the Income Tax (Earnings and Pensions) Act 2003, applies to the tax status of contractors placed in roles, not to the recruitment agency's own fee arrangements with clients. However, if your agency is also supplying contractors on an ongoing basis rather than making permanent placements, separate contractor supply agreements should address IR35 status determinations and liability allocation between the agency and the end client.
What happens if a client refuses to pay my placement fee after the candidate starts?
If your contingency recruitment contract is properly executed and the fee trigger conditions are met, you can pursue the debt through the County Court using the Money Claim Online service for amounts under £100,000. You are also entitled to claim statutory interest under the Late Payment of Commercial Debts Act 1998 and reasonable debt recovery costs. Registering a formal Letter Before Action first is strongly recommended and required under the Pre-Action Protocol for Debt Claims.
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.