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Recruiting Services Agreement
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This recruitment service agreement protects recruitment fees, clarifies expectations, and reduces disputes between recruiters and clients.
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What is a recruiting services agreement?
A recruiting services agreement is a type of services agreement between the businesses looking for candidates and a professional recruiter, setting out terms and conditions for the provision of recruitment services. A standard recruitment agreement includes the following:
- scope of services to be provided and requirements for candidates;
- payment terms;
- confidentiality obligations;
- termination clause;
- protection of intellectual property rights; and
- dispute resolution clause.
A recruitment service agreement is a widely used legal tool businesses and employers use in Australia that enables them to engage professional recruitment agencies to source suitable candidates.
When do you need this recruitment service agreement?
A solid and professionally drafted recruitment service agreement can be a helpful legal tool for:
- businesses looking to hire niche or top-tier talents;
- Australian employers seeking candidates from overseas;
- startups and small businesses outsourcing the recruitment process to professional agencies;
- businesses recruiting the company’s executives;
- one-off hiring for ongoing or urgent projects; and
- professional recruitment agencies needing a solid document template for daily usage.
This document is used to help employers across Australia to find and recruit suitable candidates to fulfil the businesses’ needs and does not cover employment relations between that company or business and the potential candidate. To hire a candidate, a separate employment contract should be used instead.
What’s included in this recruitment services agreement template?
A standard recruitment agreement template must include a number of core elements.
Scope of Services
The recruitment process goes beyond simply “finding” a candidate. Services may include reviewing resumes, contacting the candidates directly, conducting interviews, making the final round of selection, etc. The client or employer is usually required to provide the minimum list of requirements a suitable candidate should be able to meet.
The contract should also outline if the services are provided as a one-off assignment or on a regular basis. In case of the provision of services on a regular basis, the contract shall additionally outline key milestones.
Confidentiality Provisions
All matters covered under a recruitment service agreement template should remain strictly confidential. As such, parties usually include a standard non-disclosure clause preventing any disclosure of information obtained during the course of this agreement.
For an extra layer of protection, parties may proceed with signing a separate confidentiality agreement.
Compliance with Laws
During the provision of recruitment services, the recruiter must comply with a number of federal and state-specific laws, including the following:
- Licensing Requirements. In states like Victoria, Queensland and South Australia, any individual or business engaged in hiring employees should hold a special licence. However, this is not the requirement for other states and territories.
- Privacy Laws. During the recruitment process, the recruiter gets access to candidates’ private data and information, including name, address, contact details, education, work experience, etc. According to the Privacy Act 1988, the recruiter should handle it securely and it should only be accessed by designated employees or staff.
- Employment Laws. Recruitment activities should comply with the Fair Work Act 2009. Recruiters must not discriminate against candidates based on protected attributes, such as origin, sex, disability, political view and other characteristics. If the recruiter is engaging foreign employees, they have to ensure first if such a candidate can meet basic visa requirements provided by the VEVO system.
Payment Terms
Depending on the scope of services provided, the payment structure may differ and include the following:
- recurring fees (monthly or weekly);
- a fixed fee per hired candidate;
- additional bonuses for finding a suitable candidate within a specified period of time;
- extra fees for additional services such as criminal checks, visa applications, etc.
All fees in the agreement should be outlined in Australian dollars, excluding any applicable taxes such as goods and services tax (GST).
Termination
Either party should be able to end the recruiting services agreement at any time by submitting a prior written notice to the other party. Considering the specifics of this type of a services agreement, a termination may not be possible if the candidate has been found. In such a case the agreement ends upon its successful completion.
How to customise this recruiting services agreement with FasterDraft?
To get a fully customisable document template, follow a few easy steps below:
- Click the “Create Document” button.
- Answer simple questions in the form.
- Select a template’s format – recruitment service agreement PDF or Word.
- E-sign the document online.
- Make a payment.
The document is ready for instant download immediately after the purchase.
Table of content
Frequently Asked Questions (FAQ)
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1. How are recruitment fees structured?
The structure of recruitment fees in a recruitment service agreement template is different from a standard service agreement. A recruiter is usually being paid as follows:
- a fixed fee for finding a number of suitable candidates;
- a fixed fee which is paid upon employment of a suitable candidate;
- a fixed fee which is paid upon employment and successful end of a probation period;
- a fixed percentage from an employee’s annual salary paid once the employment contract is signed;
- a fixed percentage from an employee’s annual salary paid once an employee passes the probation period; or
- any other mixed arrangement from the above.
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2. What is a replacement guarantee?
A replacement guarantee is a typical clause in recruitment services agreement templates to guarantee that a placed candidat remains employed for a specific period of time. If the candidate leaves within this timeframe, the recruiter may be required to find a replacement at no additional cost.
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3. Can recruitment fees be disputed?
No. The fees for the provision of services under the recruiting services agreement are agreed upon by both parties in the document. The subsequent decrease or increase of those fees is only possible upon mutual written consent of both parties.
Since Australian consumer laws partially apply to this type of agreement, the client shall have a right to dispute the fees provided the services are of insufficient quality or do not correspond to the agreed scope. In that case, the recruiter may be requested to provide services again at no additional cost. Once the dispute cannot be resolved amicably, parties should refer the dispute to the court.
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4. Is this agreement legally enforceable in Australia?
Yes. Once this recruiting services agreement is signed by both parties, it becomes legally enforceable and valid in Australia. It means that in case of a dispute, parties can present this document in the court as legal proof.
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5. What is the service level agreement for recruitment?
A service level agreement recruitment is a special type of recruitment contract that is specifically designed for the recruitment of a large number of new candidates on a regular basis. This is common for big companies that prefer to outsource recruitment and HR processes to professional recruiting agencies.