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About 6 months ago I was in permanent employment, but was sent an email from a recruitment agency advertising a contract role for one of their ‘clients’. The role sounded a perfect fit for me, and I had thought of going contract for a while. I suspected that the client was a company that I knew, and I’d done work for them before through a previous company.
So I sent off my CV to the recruitment company. They liked it, and sent it on to their ‘client’. They liked the CV and wanted to arrange an interview.
At this point the day rate was discussed. I asked for X, which I wanted to use as a jumping off point. The feedback I received from the recruitment company was that the rate was too ambitious. They offered Y, which I was happy with.
I went to the interview. They liked me, but said that the day rate quoted was too high. They asked if I had discussed this with the recruitment company. I confirmed that we had, and that we had agreed on Y. The client said that they were still being quoted X.
I left the interview, gave feedback to the recruitment company, and was hopeful that something would get sorted. The recruitment company sent over a contract for me to review.
Next I was contacted by the my interviewer, saying that they wanted to take me on, but that they had no relationship with the introducing recruitment company (despite the recruitment company claiming that they were clients), and due to their protracted purchasing system it would be hard to set this up. He asked if I had any agreement with the employment agency, and I said I had nothing signed. It was suggested that I could go through another agency, let’s say agency B. We both agreed to stop communications with recruitment company A, I got a contract through company B, and I’ve been on contract for 5 months now. Recruitment company B get a flat rate fee per day for managing my contract and paying my Limited company.
However…
Recruitment company A have found out that I’ve been taken on, and are now pursuing the client company for costs.
In hindsight both the interviewer and I have over-simplified our relationship with recruitment company A. Although no agreements have been signed, we have used their services up to the point of interview. We have replied to emails with footers that refer to ‘terms and conditions available on request’.
Recruitment company A have made two offers:
• A flat fee equal to the whole value of my initial contract. Y x ~90 days. This would effectively double the cost of my initial contract to the client, as is therefore very expensive.
• A rate per day worked equal to the difference between my initial day rate offer (X) , and what I now get (Y). X – Y = Z per day. For the initial contract period this is about ¼ of the first option, but this cost would be ongoing if my contract were to be renewed. This figure is about 5 times as much as recruitment company B is getting, and what the client would realistically expect to pay.
So now my contract is up for renewal, and although the client is happy with my performance, the involvement of recruitment company A is a headache for them, and a worry to me. So far they have discussed the following options:
1. Accept offer 1 – very expensive, but draws a line under the issue.
2. Accept offer 2 – less expensive for the initial contract, but comparatively expensive if the contract is renewed. It is my worry that this will lead to me losing my contract.
3. Ignore recruitment company A, and let their large legal team sort it out.
4. Negotiate something between offer 1 and 2 that draws a line under the issue.
I understand that I have been a bit naive to get in this situation in the first place. I was led by the client and the desire to win my first contract.
The client clearly initiated the mistake in using the services of recruitment company A without a formal agreement, and then ignoring this when giving me a contract through company B. They have the financial liability, but I might lose my contract because of it.
Is there anything my client can do to limit their financial liability?
Is there anything I can do to make it more likely that my contract can be renewed without a financial penalty to me client?
Is this employment law or contract law? Any advice?
Hmmm, sounds like most of the other underhand things STW's seem to encourage. Estate agent markets your house, STW'r tries to get out of it by not paying them type of thing.
So they 'marketed' you. Found you a suitable position. Were in the process of negotiations and you and the company decided to get in cahoots and cut them out. Even moreso being cheapskates by involving another company just because their costs were cheaper.
If I was company A I would be looking to shaft both the company and yourself and I would not be negotiating. To the point where I would be pushing them to get rid of you if they couldn't afford the demands.
What is it with people not wanting to pay for a service they have asked for? You may think companies haven't done enough for the money or have been incompetent but at the end of the day they did what they were employed to do and you shafted them.
Start looking for another job. Carefully.
Whether you stay, or go, company A is going to go after your client for the fee they have already earned, and rightly so. It's a matter between your client and company A, and perhaps will be a learning curve for whoever in HR cocked it up and will end up paying twice for the same service.
If they get rid of you, how exactly does it save them money? Offer 1 still applies.
You are working for a pretty shitty company IMO
This is very basic stuff they should be (and probably were) aware of of.
IMO the company were playing games from Day 1
I wouldnt want to work for a company like that
If they get rid of you, how exactly does it save them money?
As I understand it, employer involved Company A but didn't want the harassment of paperwork or paying higher costs. If contract is renewed employer will have to pay the introduction fee they should have paid in the first place so might not bother with renewing OP's contract and use Company B to source new contractor. if Company B contractor turns out to be OP, Company A will seek to get the fees they were due for the job they were asked to do and did.
As new contractor, OP was probably not aware of how this works and may have just learned a potentially expensive lesson
EDIT but I'd agree with FunkyDunc - whoever placed the order with agency should have known what they were doing
I'm afraid to say that it's bad practice on your part and that of the company. You've set up as a Ltd company so you should act as a company in a correct business manner.
Your Ltd company tendered services, you accepted a rate for those services (via the agent), the client accepted the introduction (introduction can sometimes be the introduction of a CV, but you were way deeper than that with the agreed interview).
The agency who introduced you both should get their fees and you'll probably have to bite the bullet and work on a different rate (if the contract continues) or move on.
Potentially your Ltd company might be a justifiable target for financial redress if the client doesn't play ball.
Lesson learned. If you expect to continue contracting with the associated benefits, recognise that 90%+ of all contract roles are through agencies/recruiters. Build strong relationships with them as opposed to trying to shaft them!
I totally agree with FunkyDunc.
what size business this this ? Under 100 people ?
(and thanks for the reminder of why, in spite of frankly bullying phone calls from accountancy service providers, I stubbornly refuse to go private limited. Minefield...)
Seems like tough shit for recruiter A, who it appears were never asked to find a candidate to start with, and had no instruction from the client.
This is the risk they took with no engagement.
Recruiters taking job specs from companies websites and advertising the jobs in the hope that they'll get paid is a practice to be discouraged.
It depends if they did that ( which I agree is scummy ) or if the client engaged but didn't like the bill after the services were used. Sounds like the latter.
[i]So I sent off my CV to the recruitment company. They liked it, and sent it on to their ‘client’. They liked the CV and wanted to arrange an interview[/i]
That sounds like he sent them his cv, they sent it on to THEIR CLIENT and they arranged an interview. That's sounds to me to be an agency doing exactly what they are paid to do!!!!
Sorry if I got it wrong, but this suggests no prior engagement;
I was contacted by the my interviewer, saying that they wanted to take me on, but that they had no relationship with the introducing recruitment company (despite the recruitment company claiming that they were clients), and due to their protracted purchasing system it would be hard to set this up.
Although really it would have been better had your employer told them the issues at the outset.
At that point the00 should have pointed out that his cv was presented to them by the recruitment agency and he was bound by their terms. Instead they calluded to get another agency involved to sort things out. No one is coming out of this looking clean other than the original agent
Dirty, dirty practise by you, agency B and the company. Agency A have nothing to loose so should and I suspect will pursue all parties.
Put it down to experience and hope they only go after the company and not you/your company.
Edit, and yes, Agency A could have just sent the CV blind but as soon as they interviewed they've decided to engage with them, if you don't want to engage, don't interview the candidate.
Flipping recruiters. It's like someone tarmacing your drive without permission then saying you're liable because you parked on it!
It's not really your (contractible) problem, but you could still be impacted - ie not extended...
If the agency who set you up hadn't got a contract with the Client, then they kinda failed - let me know who they are and I'll offer my services to sort out their processes 🙂
I'd keep my head down if I was you.
Also this happened to me once, but perm rather than contract. In this case I was introduced by Agency A (they'd invited me to a Rugby match with a spare ticket, as they were sure one of their clients would be interested in me). Unfortunately my CV had already been passed to the client through Agency B (who had got me previous work). The client paid Agency B when they took me on. Agency A weren't happy, and I felt bad - but as the Consultant said, "lesson learnt for their processes".
Flipping recruiters. It's like someone tarmacing your drive without permission then saying you're liable because you parked on it!
Not really, more like you being offered tarmacing serviced after a knock on the door, accepting them and once complete the job you pay another company for the work as you'd agreed for them to do it previously.
Ianal but Can you passively accept a contract? Assuming not (hence tick boxes asking you to confirm you've read the terms and conditions etc) their Ts&Cs be damned frankly (i'd expect they have to provide them too, rather than giving you the option to view them), if they've introduced you and handed over your details without getting an agreement from the client it's their own dumb fault. Morally its unpleasant but business isn't about morals, it is about contracts.
If you sent product to a customer with no order for it you'd thoroughly expect to not get paid for it, and at best, to have to "beg" to get it back.
Sounds to me like the recruitment agency either
(a) screwed up by not contracting either party and are now trying to recover their end, fair play to them, I'd do the same but wouldn't expect anything more than nothing or a good will gesture.
Or (b) are exorbitant, know they are, and largely make a living threatening legal action to get fees no-one would agree to in the first instance. It's not something I'm aware of in a recruitment agency scenario but it's a very common scam for marketing/advertising stuff - you agreed to this, here is your huge bill for a (usually very poor quality item) (you accepting the item/providing details over the phone etc is usually cited as the order), if you don't pay we'll sue. My dealings with recruitment companies don't incline me to think they're above b
If you or your new employer have signed anything mind then I'd expect you've not a leg to stand on and frankly it serves you right for trying to diddle them out of something [s]they're legitimately entitled[/s] you've contractually agreed to.
Not really, more like you being offered tarmacing serviced after a knock on the door, accepting them and once complete the job you pay another company for the work as you'd agreed for them to do it previously.
Not really, if the client had no relationship with recruiter A prior to sending the CV then there was no knock on the door, and no offer of service.
As soon as you offer an interview you've accepted their services, you don't interview someone unless you want to hire them, that CV came from Agency A,if you didn't want to engage they shouldn't have set an interview through that company.
Lunge,
If I gave you a new bike, then said you owed me £X for it, would you pay? You may, most would tell me to go jump.
Would you go into a shop try on some shoes/a bike/test drive a car, then order them from amazon at 1/3rd the price? You may not, many would.
Would you get canyon uk to send you a demo bike, try it for size, return it then order one for delivery through a friend in € or for collection in € because it's massively cheaper? You may not, but many would.
As soon as you offer an interview you've accepted their services,
It isn't anything without some black and white paper with scribbles on it, and a job should NOT have been advertised on behalf of the client by agency A (let alone seeking candidates and sending a CV) without one.
It isn't anything without some black and white paper with scribbles on it, and a job should NOT have been advertised on behalf of the client by agency A (let alone seeking candidates and sending a CV) without one.
That's true, agency A are not innocent in this, they've played fast and loose. But, neither are the company, they interviewed a candidate from an agency not the their supplier list, an agency they would have had to have interacted with to get the interview set up and to give feedback/offer the job.
As we're into analogies and we're on a bike forum, let try this:
You're a bike shop and need to reorder some tubes, you've always used company B to supply them but company A phones up unannounced and says we can get you some betters ones (the OP must be better as he was hired, not agency B's people), are you interested? You get company A's tubes, like them but realise they cost an extra 10%, so instead of paying company A for a better product that was delivered, you pay company B the money for a poor product that wasn't. Somehow, people are arguing that that is OK.
I think we're really stretching the analogies here!
I think we agree that the client should not have interviewed the OP, but I'd be giving agency A the big FO nontheless.
The problem with your analogy though lunge is that the tubes delivered are the same ones, not different, no one is being paid for a product which wasn't delivered, they're being paid for the delivery.
So, ignoring the rights you'd have as a consumer as they don't apply in the original case...
You always buy your tubes from shop b (to stay inline with the op)
Shop a rings you up, says would you like to *see* our tubes [no contract so no obligation], you say yes and they deliver one.
When it arrives you like the tube but not the price. You know if you ask shop b to order you that exact same tube, then that's what you'd get, only you'd pay shop B's price, which you do like.
So... You return the tube to shop a, who don't make a sale but their supply in the first instance was without obligation (they didn't ask you to sign a contract)
You order the tube from shop b who deliver it at a more palatable price.
It's underhand, its not nice, but it is ok.
It happens all the time, it's why in business you do your best to keep your suppliers secret from your customers, unless people are obliged to do otherwise they will order a non exclusive product through the cheapest supplier.
My supplier may not sell to you directly, but they do a to a competitor, and if you know it's the same product and my competition is cheaper, who do you buy from?
I'm glad to see that the feelings and responses to this are as mixed as my own. I can see all points of view. I will know to do things differently in future, but struggle to see that the mistake was solely mine.
Agency A had no contract with the client.
The client did arrange an interview through agency A, which was a mistake if they didn't want to set up the procurement with them or agree a price for their services.
I was keen to get the contract, and was happy to go through whoever would get me that contract, and thought that the lack of a signed agreement would allow me to go wherever I wanted.
If, hypothetically speaking, I had gone with agency A from the start, and they then ramped up their prices with the client, could the client drop agency A and take my company on through another agency? Does the 'right' they have over me only exist for the initial contract period?
wrecker - MemberAs soon as you offer an interview you've accepted their services,
It isn't anything without some black and white paper with scribbles on it,
OP knew or ought to have known that Rec Co would charge for services, and by using their services, is liable for a reasonable fee IMO.
Since when does the candidate pay recruiter fees? 😆
Does the 'right' they have over me only exist for the initial contract period?
You haven't signed anything, they have no "right" over you at all.
Cynic-al - I agree. However I don't think that either of the options offered represent a reasonable fee.
BTW the client is a large multinational with 1000+ employees in the UK.
It's not unheard of 😛
Wrecker - I haven't yet been asked to.
If I were in the clients shoes, I'd try and suggest something along the following lines;
Tell company A that you simply can't pay them as you have already paid company B, but as they have demonstrated that they can source appropriately skilled people that you will get them put onto their agreed supplier list and give them a shout on future vacancies.
Now company A [i]should[/i] be happy to get a new (large) client who won't have to fork out twice for the same thing.
Wrecker - Sounds sensible to me. It was suggested by the client that if my contract was extended, I go though agency A. However agency A have rejected this option - it appears that they don't want to build a long term relationship.
Ianal but Can you passively accept a contract?
IANAL either, but the answer's yes. The most common place this happens is employment - people (on either side of the transaction) sometimes say that there's no employment situation because a contract isn't signed.
If you tell someone that you will pay them £x per week, under certain terms and conditions, if they come and do Y thing for you, and they then come and do Y, and you pay them £x, then a contract is deemed to exist for that arrangement, with or without ink on paper about it.
In this case, if an agency introduces a potential employee to a potential employer under certain terms and conditions, and the employer employs that person, then they are bound by those terms and conditions (subject to various other legal tests, such as reasonableness, being generally legal etc.)
what is their cost though? i mean if it went to court, and they've already rejected a proposal of a relationship going forward, all they can clam for is the lost commission up until now?
If you tell someone that you will pay them £x per week, under certain terms and conditions, if they come and do Y thing for you, and they then come and do Y, and you pay them £x, then a contract is deemed to exist for that arrangement, with or without ink on paper about it.
Agreed but that's not passive though, that requires input from both parties, "if you do this I will pay that", which in this case would be "if you agree to pay me X (assuming they're successful as an applicant) , I'll introduce candidate y", it appears to me <edit, entirely based on the op's post> what has happened is that that conversation came after the intro, rather than before, I.e. Services provided before agreement of cost/sale.
Don't get me wrong if they had the conversation, agreed it, but then paperwork didn't appear until afterward and they now refused to sign that's different to not having a contract - though difficult to prove I imagine, (unless they've agreed in writing of course so you have documented proof).
Rather, by passive I mean, can "we" legally be contacted because "I" suggested terms and "you" neither refused or agreed to them but used the service any how?
I'm terms of the emails I'd be very surprised if they could argue that there were terms and conditions made available, they never asked for explicit agreement, but took your continued communication to be acceptance of those ts and Cs, especially where they're not in the content of the email its self but rather linked to. (I assume there wasn't a contract contained in the emails.)
Regardless of all the analogies (which are largely misinformed and absolute nonsense), Lunge is spot on with this.
You're all grown ups and you all accepted each other's terms of engagement. You wouldn't have had the engagement without the introduction so the moral stance is that you were wrong to go direct (as was the company engaging you directly).
Mistakes happen though so deal with it in a professional manner otherwise you could end up with a large bill. It will be no hassle at all for the agency to run it through court as you'll end up paying court cost too.
It will be no hassle at all for the agency to run it through court as you'll end up paying court cost too.
But only if the op looses and any judgment includes awarding costs. Otherwise it could cost the agency a lot of money, heck they might even have to pay the op's costs.
Whilst what the op has done may be immoral, a court has no jurisdiction over morality. Hence the question is about liability and law, not "am I bad man".
<edit>
such as forgetting to get a contract (verbal or in writing) in place before carrying out workMistakes happen though
such as seeing what you can get but knowing to walk away if things don't look likely to pan out.so deal with it in a professional manner
Morals? 😆
The OPhas done nothing wrong and is not liable for anything. If the agency weren't asked to find a candidate for the client before the introduction then they were acting on a wing and should wind it in.
Im with Wrecker on this. As someone who is pestered by agencies I cant use because they are not on our supplier list and know it, to look at CVs for jobs I dont have then I have very little time for Agency A.
Whenever I have used agencies to get work then I have a written agreement with them that states what their cut will be so both sides know what they can expect from the fees charged to the client.
If Agency A wants to look at anything its the practices of their staff that landed them in this position.
Not to mention the fact that agency A lied to the OP to get him on board in the first place!
Wrecker has it right imo. Don't understand the others who blame the open.
Dangeourbrain - yep and the law will be that by accepting an interview via the agency, the op and client have agreed to engagement terms.
The agency will look to the client for financial redress but they could choose to go after the op too.
I would be prepared to suggest that the agency have a 99% chance of success in a court. If this is the case, the op should have associated insurances to cover this sort of occurrence and the agency will use the op's Ltd co.
If the op wants my professional advice (foc) I will happily advise on the route to take as I deal with this sort of stuff everyday. Email me directly if you want, email in profile.
Stu.
the law will be that by accepting an interview via the agency, the op and client have agreed to engagement terms.
Surely not if they misrepresented their position by claiming to the OP that they were already engaged by the end client when they weren't
Something to think about, agency A were only engaged with as they got someone that agency B couldn't, someone better, the OP, that has to be worth a few quid. I think that both the company and agency A behaved a tad questionabley though not in a way that is uncommon. I also think that irrelevant if you think agent A should get s fee, agent B sure as hell shouldn't.
And as someone who has been both hirer and recruiter, on both sides of this conundrum I feel I pro am speak with a bit more knowledge on this subject than most.
There is no ownership of client.
Look at it another way, if they hadn't have made the introduction, the client or op would not have received benefit.
By agreeing to the interview, all concerned agreed terms - regardless of how the initial introduction was made. If this had all ended well, the client and op would have been delighted the the agency made this sort of approach.
There is no misrepresentation once they've all agreed to an interview (in this example).
Again, lunge is correct.
I don't totally believe that the op and the client didn't know what was happening or the implications of 'back-dooring' this contract, but let's put it down to experience. Lesson learned.
Was thinking about this last night and I think one of the big things people are forgetting is that the OP was found by Agency A and not Agency B. Those suggesting that they should just get the same person (or using an analogy of the same product) from Agency B forget that they can't, only Agency A contacted him, got him to interview, got him through the process.
This is why Agency A should get paid, they used their expertise to find a candidate, contact him and market him to a company who they knew would like him, they did this so well that they got an interview and then a placement out of it. The OP got a job he wanted at a rate he was happy with, Agency A got a fee, the client got the right man, all was well in the world.
Hmmm, sounds like most of the other underhand things STW's seem to encourage. Estate agent markets your house, STW'r tries to get out of it by not paying them type of thing.
except that overwhelmingly the consensus on this thread does not bear that out. 🙄
this is not employment law
a contract is not only a signed piece of paper with "contract" written on it
3. Ignore recruitment company A, and let their large legal team sort it out.
4. Negotiate something between offer 1 and 2 that draws a line under the issue.
options 3) and 4) are the same thing
I would be prepared to suggest that the agency have a 99% chance of success in a court.
I would agree.
OP, you're setup as a limited company? Wind it up and set up a new ltd company. Problem then stops for you and is between A and client and will be in relation to A recouping historical costs for a contract that has now ceased.
that's absolutely watertight legal advice and nothing could go wrong with it