Introduction
When it comes to conducting recruitment services and managing fee structures and payments in the context of business law, it is essential to have a clear understanding of the relevant business terms. These terms help establish the rules and guidelines that govern the relationship between recruitment service providers, clients, and candidates. In this article, we will explore some key business terms that are crucial for conducting recruitment services, establishing fee structures, and ensuring smooth payment processes.
Recruitment Services
Recruitment services refer to the activities involved in sourcing, screening, and selecting candidates for job openings within organizations. When engaging in recruitment services, it is important to define the terms and conditions of the service agreement. This agreement typically includes the scope of services, responsibilities of the recruitment service provider, and the obligations of the client.
Some key business terms related to recruitment services include:
1. Service Agreement
A service agreement is a legally binding contract that outlines the terms and conditions of the recruitment services to be provided. It includes details such as the duration of the agreement, fees, payment terms, and any specific requirements or expectations.
2. Candidate Sourcing
Candidate sourcing refers to the process of identifying and attracting potential candidates for job vacancies. Recruitment service providers may use various methods such as online job boards, social media platforms, and professional networks to source suitable candidates.
3. Screening and Selection
Screening and selection involve assessing candidates’ qualifications, skills, and experience to determine their suitability for specific job roles. This process may include reviewing resumes, conducting interviews, and conducting background checks.
Fee Structures
Fee structures in recruitment services determine how the service provider is compensated for their services. These structures can vary depending on the type of recruitment service and the agreement between the service provider and the client. It is important to establish clear fee structures to avoid any misunderstandings or disputes.
Here are some common fee structures used in recruitment services:
1. Contingency Fee
A contingency fee is a fee structure where the recruitment service provider is only paid if a successful placement is made. The fee is typically a percentage of the candidate’s first-year salary. This fee structure is commonly used for permanent placements.
2. Retainer Fee
A retainer fee is a fixed fee paid to the recruitment service provider regardless of whether a placement is made. This fee is typically paid upfront and may cover a specific period of time or a certain number of candidates. Retainer fees are often used for executive search or specialized recruitment services.
3. Hourly or Project-Based Fee
Some recruitment service providers charge an hourly or project-based fee for their services. This fee structure is commonly used for short-term or specialized recruitment projects where the scope of work is well-defined.
Payments and Business Law
When it comes to payments in the context of recruitment services, it is essential to comply with relevant business laws and regulations. This ensures transparency, fairness, and compliance with legal requirements.
Here are some key considerations related to payments and business law:
1. Invoicing and Payment Terms
Clear invoicing and payment terms should be established in the service agreement. This includes specifying the payment due date, accepted payment methods, and any applicable late payment penalties or interest charges.
2. Compliance with Employment Laws
Recruitment service providers must comply with employment laws and regulations when conducting their services. This includes ensuring fair and non-discriminatory practices during the recruitment process and adhering to minimum wage requirements.
3. Confidentiality and Data Protection
Recruitment service providers handle sensitive personal information during the candidate selection process. It is important to comply with data protection laws and maintain confidentiality to protect the privacy and rights of candidates and clients.
Permanent Recruitment – Scale of Fees:
Salaries up to £21,999 – 18%
Salaries between £45,000 and £79,999 – 25%
Salaries between £22,000 and £44,999 – 20%
Salaries of £80,000 and above – 30%
All introduction fees are expressed as a percentage of the total first year’s gross annual remuneration package in accordance with the scale ranges above which would include (but is not limited to) salary, commission, guaranteed bonus, car allowance, shift allowance, overseas premiums, living/accommodation allowances, and shares. A company car is valued at £8,000 additional salary. A minimum fee of £10,000 will be charged for all and any Executive Division introductions. The Client agrees to notify the Company immediately when a Candidate introduced by the Company is engaged. The Client shall pay a fee (“the introduction fee”) which shall be invoiced on the day a Candidate introduced by the Company to the Client commences employment with the Client.
Guarantee period:
In the event that any Candidate terminates, or the Client terminates the engagement, within 12 weeks of the specified date upon which such Candidate commenced work for the Client and provided that a) the Client notifies the Company in writing of the termination of engagement within 7 days and b) the Client (or related company) does not engage the Candidate within 12 months from the date of termination and c) the termination is not due to redundancy and d) all monies due from the Client have been paid in accordance with these terms of business, then (for the next 6 weeks) the Company will endeavour to seek a replacement (to remuneration up to the same value as the leaver) at no extra cost to the Client except for additional advertising costs (costs shall be agreed prior to any advertising). If unsuccessful, PGL-PORR GROUP LIMITED will pay the Client a refund against the fees paid as follows: Up to 6 weeks service 50% refund 7 – 12 weeks service 25% refund.
Retained Assignments:
Retained assignments are payable in three stages, and are non-refundable, as follows:
The Retainer – one third of projected total fee on commencement of assignment
Short-List Payment – one third of projected total fee on acceptance of the shortlist
Completion Payment – the balance of total fee outstanding based upon the remuneration package
A satisfactory shortlist will be a minimum of three candidates who meet the agreed specification and are available for Client interview. If a Retained Assignment is cancelled by the Client, or the Client for any reason alters materially (at the discretion of PGL-PORR GROUP LIMITED) its requirements, then a “cancellation fee” of 10% of the projected first year’s gross annual remuneration package will be immediately payable in addition to the fees already due, plus all the agreed advertising costs and other expenses incurred by PGL-PORR GROUP LIMITED.
Temporary Recruitment – Hourly Rates:
The Client agrees to pay the hourly charge of The Company agreed at the time of booking of the Employee for all hours actually worked. Any other expenses as may be agreed shall be itemised on The Company’s invoice in addition to this charge. The Company reserves the right to vary the charge on an existing or subsequent assignment with immediate effect subject to prior notification being given to the Client. PGL-PORR GROUP LIMITED will be responsible for the Employee’s remuneration deducting PAYE Income Tax, PRSI and USC contributions and accounting to the relevant authorities for these deductions. In the event that a Temporary assignment with one Client exceeds 104 weeks and the temporary worker becomes eligible to a redundancy payment under the terms of the Redundancy Payments Acts, the Client indemnifies PGL-PORR GROUP LIMITED for any associated net Redundancy costs.
Contract – Monthly Rates:
The Client agrees to pay 3% per month (or part thereof) of the Candidate’s gross annual remuneration package to The Company. Invoices will be charged at the beginning of each assignment for the projected length of the appointment, are not refundable. The Client will be solely responsible for the Employee’s remuneration deducting PAYE Income Tax, PRSI and USC contributions and accounting to the relevant authorities for these deductions.
Temporary to Permanent:
If the Client wishes to engage the Candidate on a permanent basis, then in addition to the temporary fees already paid, the Client shall pay a permanent placement fee (see “Permanent Recruitment”) and providing that the Candidate has been employed through the PGL-PORR GROUP LIMITED payroll, the following discount to the permanent fee scale will apply:
27 – 39 weeks (incl.) 20% discount
40 – 52 weeks (incl.) 25% discount
1yr + 30% discount
N.B. No guarantee period applies for temporary to permanent placements.
Employing the Candidate:
In the event that any Candidate introduced by PGL-PORR GROUP LIMITED is subsequently employed by the Client (or related organisation) in any capacity whether temporary, permanent or self-employed, within 12 months of the initial introduction date, whether referred internally, by another Agency or by any other means, the Client shall pay the permanent placement fee plus 12% interest from the Candidate’s start date, which interest shall accrue monthly in arrears. This applies in all cases including where a client no longer uses the services of PGL-PORR GROUP LIMITED. Furthermore, if a Client refers an introduced Candidate to any third party who is subsequently employed by them, the same fees will apply and the Client will be liable to pay PGL-PORR GROUP LIMITED’s fees, whether or not it can recover them from the said third party.
Advertising:
The Company is able to provide an advertising service to the Client, for which charges incurred by the Company are payable by the Client. The Company will accept cancellation of an advertisement provided that the Client gives sufficient notice to enable the Company to cancel the advertisement before the press closing date.
Payment Terms:
All monies due hereunder shall be paid by the Client as follows:
Permanent Recruitment is billed on the start date of the candidate and payment is due within 14 days.
Temporary Recruitment is billed weekly (except for Contract staff – see above) and payment is due within 7 days.
Retained Assignment fees, Contract fees, Temporary to Permanent fees, Advertising outlay fees and all others fees are due for payment within 7 days of invoice date.
All payments, regardless of currency, must equate to the Euro invoice total at date of payment. In the event of non-payment of Temporary invoices, the Company may, without prejudice to its other rights, withdraw the Employee with one hour’s notice. Interest at 12% and any associated collection costs will be applied to overdue invoices in accordance with the Late Payments in Commercial Transactions Regulations 2012. VAT will be added to all invoices at current rate.
Data Protection:
All defined terms have their meaning in the Data Protection Acts or the GDPR and in this section:
“Candidate” means an applicant for a temporary, contract or permanent position of employment introduced to the Client by the Company;
“Data Discloser” means the party, which discloses Shared Data to the other party;
“Data Protection Acts” means the Data Protection Acts 1988 and 2003 as amended, revised, modified or replaced from time to time;
“Data Protection Commission” or “DPC” means the data protection authority for the time being in the territory of UK;
“Data Recipient” means the party which receives Shared Data from the Data Discloser;
“Data Security Breach” means a breach of security leading to the accidental or unlawful destruction, loss, alteration, unauthorised disclosure of, or access to the Shared Data;
“Data Subject Access Request” or “DSAR” has the same meaning as the “Right of access by the Data Subject” in Article 15 of the GDPR;
“General Data Protection Regulation” or “GDPR” means Regulation (EU) 2016/679 on the protection of natural persons with regard to the processing of personal data and the free movement of such data;
“Services” means the recruitment services to be provided by the Company to the Client under these terms of business; and
“Shared Data” means the data, including Personal Data, to be shared between the Company and the Client under this section.
Sharing of Personal Data: This section sets out the framework for the sharing of data, including Personal Data and Sensitive Personal Data or Special Category of Personal Data, between the Company and the Client as Data Controllers. It defines the principles and procedures that the parties shall adhere to and the responsibilities the parties owe to each other.
Agreed Purposes: The parties agree to only process Shared Data as described below in ‘Types of Data’ (a) to allow the Client to evaluate and recruit Candidates; and (b) to enable the Company to provide the Services.
General Compliance:
Each party shall ensure compliance with the Data Protection Acts, GDPR and all other applicable laws and codes of practice and guidance issued by the DPC at all times whilst these terms of business apply between the parties.
Types of Data:
The following types of Personal Data will be shared between the parties whilst these terms of business apply between the parties:
a) Candidate name and contact information;
b) Candidate educational and legal qualifications;
c) Candidate employment history;
d) Candidate references; and
e) Salary and remuneration requirements.