Recruitment Fee Protection Contract UK Template
Recruitment agencies and headhunters across the UK face a persistent and costly problem: clients bypassing the agency to hire candidates directly, leaving recruiters unpaid for months of sourcing work. Without a robust recruitment fee protection contract, you have little legal recourse when clients circumvent your introduction or delay payment indefinitely. A properly drafted agreement establishes your right to a placement fee, defines the introduction period, and incorporates enforceable payment terms under the Late Payment of Commercial Debts Act 1998, allowing you to claim statutory interest on overdue invoices. It also clarifies the terms under which a rebate or replacement guarantee applies, protecting both parties from dispute. Whether you operate on a contingency or retained basis, formalising these terms before you begin any search is essential. Generate your recruitment fee protection contract now and safeguard every placement you make.
Generate your Recruiter Terms of Business free →Key clauses in a Recruiter Terms of Business
Introduction and Ownership Rights
This clause defines precisely what constitutes a valid candidate introduction by your agency, establishing the point at which your fee entitlement begins and preventing clients from claiming they sourced the candidate independently. Without a clear definition rooted in your terms of business, courts applying general contract principles under English law will have limited guidance, making fee recovery significantly harder.
Fee Recovery and Late Payment
This clause sets out the placement fee structure, payment due dates, and your statutory right to charge interest at 8% above the Bank of England base rate on overdue invoices under the Late Payment of Commercial Debts Act 1998. It also entitles you to claim reasonable debt recovery costs, giving you a legally enforceable mechanism to pursue non-paying clients without resorting solely to litigation.
Candidate Engagement Period
This clause specifies the duration — typically six to twelve months — during which the client must pay your fee if they engage a candidate you introduced, whether directly, through a third party, or via a subsidiary. This protection is critical because clients sometimes delay an offer until they believe the introduction period has lapsed, and a clearly worded clause removes any ambiguity enforceable under standard UK contract law.
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Generate free →Frequently asked questions
How long should the candidate introduction period last in a UK recruitment fee protection contract?
Most UK recruitment agencies set an introduction period of between six and twelve months, during which the client owes a fee if they engage the introduced candidate in any capacity. The appropriate length depends on your sector and the seniority of roles you fill, but it must be clearly stated in your terms to be enforceable. Courts applying English contract law will look to the written agreement, so an ambiguous or absent timeframe weakens your position considerably.
Can a UK recruitment agency charge interest on unpaid placement fees?
Yes. Under the Late Payment of Commercial Debts Act 1998, recruitment agencies operating on a business-to-business basis can charge statutory interest at 8% above the Bank of England base rate on invoices that are not paid within the agreed contractual period, or within 30 days if no period is specified. You are also entitled to claim a fixed debt recovery charge of between £40 and £100 depending on the invoice value, plus reasonable recovery costs.
What happens if a client hires a candidate through a different agency to avoid paying our fee?
If your recruitment fee protection contract includes a properly drafted anti-circumvention clause, you retain the right to your placement fee even if the client routes the hire through a third-party agency or engages the candidate as a contractor rather than a permanent employee. The key is that the clause must explicitly cover all forms of engagement, including consultancy arrangements and umbrella company contracts, to close the loopholes clients sometimes exploit. Without this protection in writing, proving entitlement under general English contract law becomes significantly more difficult.
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.