Recruitment terms of business, clause by clause.

01First, a word on advice

This is a checklist, not legal advice. Terms of business are a contract, and the right wording depends on your agency, your clients and your state. Use this to check what your terms cover, then have a lawyer who knows recruitment review them.

02Placement fees

The clause most likely to be argued about. It should answer:

• What the fee is: usually a percentage, plus GST.
• What it’s a percentage of. Spell out the remuneration package: base salary, superannuation, and any bonus, commission, car or other allowance. “Salary” alone invites a dispute.
• When you invoice: for example, when the candidate accepts an offer.
• When it’s due: a number of days from the candidate’s start date.
• That it applies whichever way the hire happens, including if the candidate is hired into a different role from the one you introduced them for.

03Guarantee period

Most agencies offer a free replacement or a partial refund if a placement doesn’t last. Say exactly when it applies:

• How long it runs, counted from the start date
• That fees must have been paid on time for it to apply
• That the client must tell you in writing, within the period
• What it doesn’t cover: redundancy, a role that changed significantly, or a dismissal that wasn’t about performance
• Whether it’s a replacement, a refund, or your choice

04Cancellation fee

If a client withdraws an offer after the candidate has accepted it, you have done the work and the candidate may have resigned. Many agencies charge a fixed cancellation fee, plus GST, in that case.

05Introductions and confidentiality

• Candidate details are confidential and can’t be passed to anyone else without your written consent.
• If the client passes a candidate on to another business that then hires them, the full fee applies.
• How long an introduction counts for: state a period after you introduce a candidate during which a hire attracts your fee, even if the client says they found the candidate another way.
• Reference checks: the client shouldn’t contact referees or current employers without the candidate’s consent.

06What the client is responsible for

Make clear what you don’t guarantee. Agencies usually take due care in selecting candidates but don’t promise performance, conduct or how long someone stays. The client remains responsible for checking qualifications and work rights and doing its own due diligence before it hires.

07If you place temps or contractors

Temporary and contract placements need their own terms: charge rates, timesheets, who employs the worker, insurance and workplace health and safety. If you convert temps to permanent roles, add a conversion fee and say how it reduces the longer the worker has been on assignment.

08The clauses everyone skips

Short, but they matter when something goes wrong:

• Acceptance: that engaging you, asking for candidate details or interviewing a candidate you introduced means the client accepts your terms
• Precedence: that your terms apply over the client’s own unless you agree otherwise in writing
• Termination: either side can end the arrangement in writing, and fees already earned stay payable
• Governing law: which state’s law applies
• Assignment, invalidity and entire agreement
• Notices: how each side gives notice, such as by email to the addresses you each provide

09Getting them agreed

Relying on “acceptance by conduct” works until a client says they never saw your terms. A signature is better evidence:

• Send terms to a named person who can agree to them, with their role, before you send candidates.
• Set the client’s own numbers (fee, payment days, guarantee period) before you send, rather than leaving blanks.
• Keep the exact version they agreed to. If your terms change, send the new version; don’t edit the old one.
• Keep a record of who agreed, their role, when, and how, together with the signed copy.

Electronic signatures are valid for most business contracts in Australia under the Electronic Transactions Acts, provided the method identifies the signer and shows they intended to agree, is reliable enough for the purpose, and the other party consents to signing electronically. Keeping an unaltered copy and a record of the signing is how you show it later.