Permanent Recruitment Fee Agreement UK | Contingency Placement Contract
Placing a candidate without a signed fee agreement leaves recruiters exposed to non-payment, fee disputes, and arguments over rebate periods. A Permanent Recruitment Fee Agreement sets out the placement fee structure, payment terms, and refund conditions before any candidate is introduced, giving both recruiter and client a clear contractual basis if things go wrong. Under the Late Payment of Commercial Debts (Interest) Act 1998, unpaid recruitment fees can attract statutory interest at 8% above base rate, but only if a valid contract exists. The Conduct of Employment Agencies and Employment Businesses Regulations 2003 also impose specific disclosure obligations on recruiters operating in the UK. A well-drafted contingency placement contract protects your fee from the moment you submit a CV. Generate yours now.
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Key clauses in a Contract
Fee Structure and Calculation
This clause defines how the placement fee is calculated, typically as a percentage of the candidate's gross starting salary, and when it falls due. Without a precise definition of 'salary' and a clear trigger event for payment, clients may dispute whether bonuses, car allowances, or benefits in kind should be included in the fee base.
Rebate and Refund Period
This clause sets out the sliding-scale refund terms if a placed candidate leaves or is dismissed within a defined period, usually three to six months. Courts have upheld rebate clauses as enforceable contractual terms under general contract law, but only where the trigger conditions, such as resignation versus termination, are unambiguously drafted.
Candidate Ownership and Re-Introduction
This clause establishes that a fee remains payable if the client engages an introduced candidate within a specified period, even after the original vacancy is withdrawn or filled through another route. The Conduct of Employment Agencies and Employment Businesses Regulations 2003 require recruiters to provide written terms before introducing a candidate, and this clause reinforces that the introduction itself creates a fee liability.
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Generate free →Frequently asked questions
Do I need a signed fee agreement before sending a CV to a client?
The Conduct of Employment Agencies and Employment Businesses Regulations 2003 require an employment agency to agree terms with a client before providing work-finding services, which includes submitting candidate CVs. Without written terms in place, recovering a placement fee becomes significantly harder because the client can argue no contract existed at the point of introduction. Sending terms by email and obtaining written acceptance, even by reply email, is sufficient under UK contract law.
Can I charge interest on an unpaid recruitment fee?
Yes. Where both parties are businesses, the Late Payment of Commercial Debts (Interest) Act 1998 automatically entitles you to claim statutory interest at 8% above the Bank of England base rate on overdue invoices. You are also entitled to a fixed debt recovery charge of between £40 and £100 depending on the value of the debt. These rights apply even if your fee agreement does not expressly mention them, but including a payment terms clause strengthens your position when chasing payment.
What happens if the client hires my candidate through a different agency?
If your fee agreement includes a candidate ownership or exclusivity clause, a fee is still payable provided you can demonstrate you were the effective cause of the introduction. English courts apply the 'effective cause' principle, meaning you must show your introduction materially contributed to the hiring decision, not simply that you submitted the CV first. Keeping a clear record of all candidate submissions, client communications, and interview arrangements strengthens any fee recovery claim.
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.