The recruitment sector has changed significantly in recent years, and the legal and regulatory requirements have become more complex. With a wide range of legislation in place for both temporary and permanent workers and the rise in the use of social media for doing business, the recruitment sector needs to be alive to these changes and the challenges they bring. We offer discounted hourly rates and fixed fees for REC members as well as a fixed and capped fee debt recovery.
We help recruitment businesses with a range of legal commercial issues
- employment – including AWR advice, disciplinary and grievance advice, tribunal claims, social media and restrictive covenant and theft of confidential information claims
- commercial – including buying or merging a business, shareholder/partnership/LLP agreements, commercial agreements, recruitment process outsourcing, managed service agreements, and IT agreements
- commercial litigation and dispute resolution – including contractual disputes, agency disputes, transfer and introduction fee disputes, temporary worker suitability disputes and managed service/neutral vendor disputes
- regulatory – including Department for Business, Innovation and Skills investigations and prosecutions, Gangmaster licensing, health and safety and health and social care regulation
- insolvency – including restructuring, directors duties, creditor advice and presenting and defending winding up petitions
- intellectual property – including database rights, social media contacts, trademarks and copyright
- debt recovery – through our Debt Fast service, a capped and fixed fee debt recovery service for unpaid temporary fees, permanent introduction fees, transfer fees and other debts
- property – including new leases, taking an assignment of existing leases, a lease renewal, rent deposit issues and planning advice, including applications and appeals.
There are also a number of legal areas very specific to the recruitment sector that our team of lawyers can advise on.
Recruitment process outsourcing
Following the introduction of the Agency Worker Regulations 2010, recruitment process outsourcing (RPO) is often used by agencies with many larger recruitment organisations using managed service provision (MSP) to better control staff and recruitment costs and mitigate risk.
Our recruitment specialists advise on all aspects of outsourcing including the contracts and relevant employment law issues such as TUPE. Working with specialist third party advisers, we can advise on VAT mitigation and issues surrounding PAYE and NIC.
Where disputes arise out of RPO and MSP, our experience assists with the prompt resolution of the disputes without protracted and costly litigation.
Recruitment agency terms and conditions
The Conduct of Employment Agencies and Employment Businesses Regulations 2003 (the Conduct Regulations) require terms of business to contain specified terms. Failure to include terms can lead to the contract being unenforceable and a recruitment business being unable to recover its fees.
Terms of business must also set out the recruitment agencies responsibilities and exclude liability for matters outside of their control. This is particularly important if supplying drivers or staff to a regulated sector such as healthcare.
A well managed business, regardless of sector, also needs clear purchasing procedures and terms so as to minimise the risk of being caught out by suppliers’ small print. We can provide you with purchase terms and associated procedures to ensure contracts with suppliers are on your terms.
Protecting your business from data, staff and client theft
Often the core value of a recruitment business is its staff, its client list and its confidential information. It is critical to ensure that these assets are protected from solicitation and theft. We can help you put appropriate systems, procedures and policies in place to help protect the value of your business whilst adhering to employment law. This often involves ensuring employees have suitable restrictive covenants that are enforceable.
Where an ex-employee breaches their restrictive covenants or steals data, it is important to act swiftly to prevent further damage. This often involves obtaining interim injunctions to prevent immediate damage pending trial.
Recruitment mergers, acquisitions and disposals
Harsh economic times have led to a consolidation in the recruitment sector with businesses exiting or bulking up through a merger or acquisition.
We help sellers identify ways in which they can make their businesses look more attractive. A buyer is likely to pay more for a business that is transparent and the affairs of which are in order. We assist buyers through all stages of the due diligence process to help them ensure that they get full value from the purchase.
We focus on sector specific issues including compliance with relevant regulations and legislation, the status and strength of staff contracts and consultancy agreements and the validity and quality of standard client terms of service.
The internet provides a low cost solution for both recruitment agencies and their clients. Management of the online recruitment process requires careful considerations of a number of areas of law including data protection and privacy, rules surrounding direct marketing, equality/discrimination issues and compliance with industry regulation.
Online recruitment, whilst cost effective, still involves significant investment in IT infrastructure and outsourcing arrangements. We can provide precedent agreements and advise on contracts proposed by third parties to ensure that they work best for your business.
Credit, debt recovery and insolvency
Our recruitment team can help you put in place robust credit procedures to minimise your exposure to bad debt, ensure compliance with your invoice financing and credit insurance terms and maximise the prospects of a recovery in the event of unpaid invoices.
We use civil enforcement and the insolvency process effectively to, where possible, promptly recover the value of your outstanding invoices. By using late payment legislation we can make the debt recovery process self funding and sometimes even profitable, returning additional funds to you to help fund your internal credit control costs.
When you are facing an insolvent debtor we work with our network of insolvency practitioners to maximise the return that you receive.
If your own business is facing cash flow difficulties we work with insolvency and restructuring advisers to help rescue the company or minimise the deficiency to your creditors and shareholders through an orderly winding down of your affairs.
Recruitment fee disputes
Fee disputes are common within the recruitment sector usually caused by the client either not understanding or trying to avoid their contractual responsibility. Our experience of such disputes allows us to resolve disputes promptly and at minimal cost. Where proceedings are necessary we often obtain summary judgment shortly after the issue of proceedings so as to avoid protracted litigation.
We help recruitment agencies with
- non-disclosed engagements or ‘backdoor cases’
- disputed transfer fees
- disputed third party engagements
- disputed permanent introduction fees
- rates disputes
- set off disputes from losses caused by temporary workers
- cases where the client has failed to sign timesheets.
Employment Law and the Agency Worker Regulations 2010
The Agency Worker Regulations 2010 came into force in October 2011. The impact of these Regulations has placed new requirements upon both end users and recruitment agencies.
Agencies are responsible for any failure to provide agency workers with the same basic terms and conditions of employment of full time staff after 12 weeks unless they are provided with incorrect information by the hirer. We can advise on what information you will need to request from hirers and how to establish efficient communication systems with hirers to reduce the risk of a breach.
Anti-avoidance measures have been put in place to ensure agencies and hirers do not deprive agency workers of their rights through the way they structure assignments and offer work. We can review your existing contracts and assignment structures to advise on compliance with the Regulations. We can also review any warranties or indemnities that hirers may wish for you to sign to ensure you are fully aware of your liabilities.
The recruitment sector is highly regulated and compliance with the regulatory and statutory framework is critical for a business to succeed.
A regulatory investigation or prosecution can result in significant cost and adversely affect business development by taking up management time. We help ensure your business practices and contracts are compliant with the Conduct of Employment Agencies and Employment Businesses Regulations 2003 and that you operate in accordance with the Employment Agencies Act 1973.
In the event of a regulatory investigation, inspection or tribunal proceedings we work closely with clients to minimise the effects on their business.