Disputes between employers and recruitment agencies are a common occurrence mostly due to a poor understanding of the terms of the contract or the absence of terms and conditions from the recruitment agency.
An employer can take the following actions to prevent an expensive dispute.
Valid Contract
To begin, ensure you have a valid contract. A contract must have some key ingredients. The parties must have an intention to enter a binding legal relationship. There must be an offer and acceptance of contractual terms and adequate consider must be made. A failure to ensure these keys elements may result in a contract not being enforceable.
Employers will often be tempted to engage applicants who had previously been introduced to them by a recruitment agency. This can result in the agency suing the employer for a breach of contract and loss of their fees. The agency may also sue for consequential losses as a result of the breach. This can include time spent promoting the applicant by the agency and time assessing their losses caused by the employer. Agency contracts will often contain a clause for damages and these act as a deterrent when reasonable but can also be unenforceable if they are punitive
Legal Advice
To avoid entering a difficult legal dispute, it is advisable to take legal advice before you enter the agency agreement. If a dispute has arisen you should look carefully at all communications with the agency both in writing and verbally. Remember that verbal contracts can be binding as a written contract if it is clear what terms both parties have agreed. Always read the contract carefully as it states the grounds for your legal relationship with the agency. The contract will cover what is expected from each party and often a complaints procedure to resolve any difficulties between the two parties. It will state the notice period to end the contract and which restrictive covenant clauses will continue to apply after the ending of the contract by notice. As stated above it may also cover liquidated damages.
Where a dispute does occur both parties should where possible enter into negotiations to avoid expensive litigation. You should carefully consider if you want to continue to have an ongoing commercial relationship. Contractual disputes can be complex and litigation can be difficult to predict with absolute certainty as both parties will argue their case in court. In addition to legal costs both parties should consider the reputation damage as court hearings are held in public. Also, carefully consider how much time you will take out of your business, time is money at the end of the day. The sensible thing to do is to take legal advice and look towards a settlement or compromise to avoid litigation.
Should you be an employer or an agency and find yourself in a difficult position please contact Quest for advice and assistance in resolving your conflict. Give us a call on 01455852028.
