Recruitment Agency Fees: How to Resolve Disputes Over Unpaid Fees

Recruitment agencies play a vital role in the hiring process, connecting employers with job seekers and facilitating recruiting the right people for a business. However, disputes can arise when employers refuse to pay the fees owed to recruitment agencies for their services. If you’re a recruitment agency facing such an issue, here’s what you need to know.

Typical Issues

There are several typical issues that recruitment agencies face when it comes to unpaid fees. These include:

• Employers disputing the quality of the candidates provided
• Employers arguing that the recruitment agency was not the effective cause of the introduction
• Employers claiming that they have already filled the position by other means
• Employers disputing the terms of the contract with the recruitment agency

It’s important to note that each case is unique, and the specific issues will depend on the facts and circumstances of each case.

How to Bring a Claim?

If an employer has refused to pay the fees owed to your recruitment agency, you may be able to bring a claim against them. In order to do so, you will need to prove that:

• You had a valid contract with the employer, which set out the terms of the recruitment services you would provide
• You provided the recruitment services as set out in the contract
• The employer has refused to pay the fees owed under the contract

A solicitor who has experience in recruitment agency fee disputes will be able to assist you in bringing a claim for unpaid fee and to advise you on the best course of action.  Typical steps include:

• Initial Assessment: This will involve a review of the contract between the agency and the employer, as well as any other relevant documents and communications. Your solicitor will be able to advise you on the strengths and weaknesses of your case and the best course of action.
• Letter Before Action: If your solicitor believes that you have a strong case, it will send a letter before action to the employer, setting out the details of your claim and the amount of fees owed.
• Negotiation: Depending on the employer’s response, your solicitor may attempt to negotiate a settlement with the employer. This can often be the quickest and most cost-effective way to resolve the dispute.
• Court Proceedings: If the employer refuses to pay and attempts at settlement faile, your solicitor may advise you to pursue proceedings through the court process. The court will consider the evidence presented and make a decision on whether the fees are owed and how much should be paid.

The Principle of Effective Cause

As highlighted, one important principle in recruitment agency fee disputes is the principle of effective cause. This principle holds that the recruitment agency will only be entitled to fees if it was the effective cause of the introduction of the successful candidate to the employer. In other words, the agency must have played a significant role in the hiring process, and the candidate must have been hired as a result of the agency’s efforts.

This principle can be complex to apply, and it’s important to seek legal advice to ensure that you’re entitled to the fees you’re claiming.

How We Can Help?

If you’re a recruitment agency facing a dispute over unpaid fees, we can help. Our experienced team of solicitors has a wealth of experience in resolving recruitment agency fee disputes, and we can advise you on the best course of action in your particular case.

Contact us today to find out how we can help you resolve your dispute.