Are you setting up a recruitment business and want to know what legal documents you need to get started? Below, we set out what initial documents you should have in place before opening your doors including a recruitment agreement, a candidate agreement as well as your online documents.

1. Recruitment Agreement

This Agreement will set out the legal relationship between your business and your clients and how you will recruit candidates. It should include the payment structure around the types of fees your client will pay for your services in finding them an employee such as:

  • Upfront payments for certain actions;
  • A placement fee for when you find them a suitable employee; or
  • Fees based on a percentage of the employee’s salary.

It should also set out what happens if the employer terminates the employee during a probation period. It may be that you are required to find them then a more suitable employee at no extra cost, or to offer them a refund on some of the fees they have already paid.

The Agreement should also include clauses to protect your business such as the obligations of your client, for example:

  • Warranties that your client will abide by equal opportunity principles;
  • The employee you recruit for your client will be treated appropriately regarding their remuneration and entitlements; and
  • The employee will only work in a position for which they were recruited and will not be required to perform any unpaid work on a trial basis.

Your Agreement should also include indemnity clauses setting out that your client indemnifies you if you sustain any losses from your client’s breach of contract. The Agreement should operate to limit your liability from any actions you or your staff undertakes in respect of your obligations.

Finally, clearly setting out termination and dispute resolution solutions within the Agreement will protect you in the event of a dispute. It will set out what each party is required to do regarding notifying the other party of an issue and how parties will attempt to resolve the issue before commencing any legal action.

2. Candidate Agreement

You will also require an agreement with the candidates you are looking to recruit for your clients. It will set out obligations in providing you with accurate information about the kind of position they are looking for and their skill set and experience. The Agreement should require candidates to provide you with referees and the relevant checks required for certain positions, such as State or Federal police checks.

It is also important to include a non-solicitation clause within the Agreement to prevent your candidates from being able to contact your clients directly without you acting as the intermediary. This is to ensure that your clients continue to pay you fees for finding them suitable candidates.

3. Online Legal Documents

As a recruitment agency, it is highly likely that you will require a website to assist you with advertising your services and engaging with clients and candidates alike. If you do set up a website, it is important to have the necessary legals in place to protect your business online.

You will require website terms of use and a privacy policy to protect your agency’s website as well as your business in the collection of personal information. Website Terms of Use are designed to apply to all users of your website, not only clients and candidates who engage your services. It will set out how visitors can use the material on your website as well as prohibited uses such as trying to breach the website’s security or uploading offensive information. It will also protect the intellectual property and copyright of the information you post.

You will need a privacy policy if you collect personal information from users online such as their name, email address and other contact details. For a recruitment agency, this is also likely to be CVs and professional referee information. It will also set out how you store a user’s personal information and the circumstances of when you will disclose this information to third parties, such as for marketing purposes.

Key Takeaways

Starting a recruitment business means that the primary focus of your business is dealing with and connecting people. It is very important to have your legal documents in place that set out the services you are providing to your business clients when finding them a candidate, and to your candidates when you are trying to place them with an employer. Protecting your business from the get-go with the right legal documents will ensure you have a strong position moving forward and will set out a clear path to follow if any disputes should arise.

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LegalVision has significant experience in helping recruiters to start up their business, or to upgrade or amend current terms and conditions to ensure they are protected to the fullest extent possible under the law. If you are not sure where to start or would like assistance in setting up these important legal documents, get in touch with our lawyers on 1300 544 755.

Bianca Reynolds

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