Employment Agency Fees

[Kent Accountant]

I have a friend who has just started a new job which she got through a recruitment agency. Obviously her new employer will be paying an introduction fee to the agency. Her employment offer includes the following paragraph:
"Where the employment involves the payment of an agency fee this will be treated as a loan. The loan will be written off in equal instalments over twenty four months starting from the date the emloyment commenced. Any fees rebated by the agency will also be deducted from this loan. Should you leave within the above period you will be required to repay any outstanding loan by deduction from your final salary or by cheque if this is insufficient."

Is this legal / enforceable?

Any thoughts will be appreciated.

This is only hypothetical as she is quite happy working there at the moment.

We have a similar clause in our own contracts referring to training costs although we have never had to enforce it so far

 

[Antonia @limeone.com]

It breaches both legislation on penalty clauses and also under EU legislation on freedom of movement of workers. However this is a matter for her to discuss now with her employer rather than relying on a claim for unlawful deduction of wages in the event of her terminating her employment and challenging the clause. It also does not cater for them terminating her!

 

[acf]

It is ridiculous. The employer had hired an employment agency to find out a suitable candidate for them and paid the agency for its services. The fee the employer paid to the agency cannot be reclaimed from the employee in any form. I understand that neither any prospective employer nor the agency can charge any fee to the prospective employee for finding and recruiting that employee for the job.

 

[Antonia @limeone.com]

The Conduct of Employment Agencies and Employment Businesses Regulations 2003 prevent the agency from seeking fees from the worker. Any clause in breach of that regulation would run the risk of being unenforceable if challenged.

On a practical note though it is unlikely a new employee will want to have a stand off over such a clause and so they should not sign the contract in its current form. If discussions with the employer prove fruitless an employee can raise a grievance over an unlawful clause in their contract. All equally unpalatable options for someone just starting employment.

 

[Pebble Communications]

How outrageous!

 

[FreelanceSEO]

The Conduct of Employment Agencies and Employment Businesses Regulations 2003 prevent the agency from seeking fees from the worker. Any clause in breach of that regulation would run the risk of being unenforceable if challenged.

On a practical note though it is unlikely a new employee will want to have a stand off over such a clause and so they should not sign the contract in its current form. If discussions with the employer prove fruitless an employee can raise a grievance over an unlawful clause in their contract. All equally unpalatable options for someone just starting employment.

I agree

I own a partnership in a recruitment agency and this is something that has been tried by employers on a number of occassions. It is illegal and completely unenforceable. Usually the best way to get around this without a confrontation is to tell the agency in question. The agency will usually make their client fully aware of the law in fear that they will also be liable for breaking the regs or even worse (to them obviously) lose their beloved fee. Ive normally seen this resolved between agency and client without need for the new starter to get involved.

T

 

[Pebble Communications]

That's a very good piece of advice.

 

[Kent Accountant]

Thanks for the replies. My friend is extremely grateful

 

[KciKay1986]

I have an active tribunal case for exactly this. Being charged my agency fees when terminating the contract. I did sign to say this was ok for them to do but I did realise 1. I would be leaving within a year and 2. how much they were.

The company deducted all my final salary and now I am facing a tribunal case for unfair/illegal deduction of wages.

Please help. Any clauses of law that I can rely on would really help

Thanks

 

[Richie N]

I agree

I own a partnership in a recruitment agency and this is something that has been tried by employers on a number of occassions. It is illegal and completely unenforceable. Usually the best way to get around this without a confrontation is to tell the agency in question. The agency will usually make their client fully aware of the law in fear that they will also be liable for breaking the regs or even worse (to them obviously) lose their beloved fee. Ive normally seen this resolved between agency and client without need for the new starter to get involved.

T

I agree with this, an employer cannot charge the employee any fee.
Your friend should contact the agency as soon as possible regarding this.

 

[INDIZINE]

This is illegal. They should be reported to REC if they are members. It is illegal to charge someone to find a job, however they phrase it.

 

[Richie N]

This is illegal. They should be reported to REC if they are members. It is illegal to charge someone to find a job, however they phrase it.

The problem is with the employer not the agency....

 

[INDIZINE]

oops sorry got lost in the confusion there, so cant report them to REC.

 

[KciKay1986]

Thanks but I have spoken to the agency about it and they will not do anything. They won't get involved.

The company says if they get a refund from the agency for my placement this is knocked off my "Final Bill"

I have asked the agency to do this as after I left this company I went back temping with them but they haven't helped me at all.

I have the tribunal coming up soon and I am afraid I will lose. The company has employed legal representation which they are telling me I will have to pay if I lose. I can't afford to pay this which is why I am taking them to tribunal in the first place. If the deduction they took was a resonable amount I would pay it just for the freedom of not working there. But now I have this tribunal hanging over my head with the risk of losing "what I still owe" and having to pay their solicitors.

I need help.

 

[Jenni384]

Have you spoken to ACAS?

 

[INDIZINE]

If you have been accepted to employment tribunal ACAS are a part of the process. You should be getting legal aid if you dont work or earn a low wage. Also, check your home, car or banking insurance or similar, which has personal legal protection cover. This can cover employment tribunals though check with your insurer. You should also consult a solicitor who offers the free 1/2 hour consultation.

 

[KciKay1986]

Thanks for the responses

I took half an hours free legal advice before I took out the claim they told me to take it to the tribunal.

I earn too much for legal aid.

ACAS have been particually useless. I'm on my own on this one it seems.

I just something in the law that states this is illegal. Unfortunatly after 4 hours of surfing the net I can't find anything concrete. It's all implied. Does anyone know anything more solid?

 

[Katy0793]

It is a criminal offence for a person carrying on an agency or an emplyment business to make any charge to a work seeker (directly or indirectly) for finding employment for him or her this is found in the Employment Agencies Act 1973 section 6(1)

"6. Restriction on charging persons seeking employment, etc.
— (1) Except in such cases or classes of case as the Secretary of State may prescribe, a person carrying on an employment agency or an employment business shall not demand or directly or indirectly receive from any person any fee for finding him employment or for seeking to find him employment.

(2) Any person who contravenes this section shall be guilty of an offence and liable on summary conviction to a fine not exceeding"

You appear to be being charged the fee indirectly.

 

[KciKay1986]

I lost the case.

Apparently it is classed as liquidated damages as it is on a sliding scale.

I ended up paying £900 + £500 costs.

Fair? I don't think so. But I will NEVER sign a contract like that again.

 

[wellington]

I have just received my last payslip and found they have deducted £1600 as part of a possible £5428.50 fee as my 80% contribution to the employment agency fee... I dont remember seeing this in the contract and even if it was there its just GOT to be illegal under the terms of unfair contracts.... I was only there three months and they want to charge me more than they paid me! Even the agency says they cannot beleive it!

 

[Richie N]

I have just received my last payslip and found they have deducted £1600 as part of a possible £5428.50 fee as my 80% contribution to the employment agency fee... I dont remember seeing this in the contract and even if it was there its just GOT to be illegal under the terms of unfair contracts.... I was only there three months and they want to charge me more than they paid me! Even the agency says they cannot beleive it!

No candidate should be charged anything, the fee is paid by the employer and the employer should not ask the employee to contribute in any way at all.
If they decide to employ someone via an agency, it is their responsibility to pay.
I would contact ACAS regarding this and your contract.

 

[Richie N]

It is a criminal offence for a person carrying on an agency or an emplyment business to make any charge to a work seeker (directly or indirectly) for finding employment for him or her this is found in the Employment Agencies Act 1973 section 6(1)

"6. Restriction on charging persons seeking employment, etc.
— (1) Except in such cases or classes of case as the Secretary of State may prescribe, a person carrying on an employment agency or an employment business shall not demand or directly or indirectly receive from any person any fee for finding him employment or for seeking to find him employment.

(2) Any person who contravenes this section shall be guilty of an offence and liable on summary conviction to a fine not exceeding"

You appear to be being charged the fee indirectly.

The agency did not charge the worker, the employer did....

 

[yorkshirejames]

I lost the case.

Apparently it is classed as liquidated damages as it is on a sliding scale.

I ended up paying £900 + £500 costs.

Fair? I don't think so. But I will NEVER sign a contract like that again.

Didn't see this thread first time around. Kcikay1986 - without knowing the details, I would expect that an appeal would be successful.

Liquidated damages is essentially nonsense. Sadly you're beyond the limit to appeal. I also fail to see how you've been awarded costs in the tribunal - in fact I wonder whether this message is a plant from one of the evil employers who do this sort of thing to discourage others?

 

[Allie32]

I am being charged an agency fee by my previous employer, I worked for the company for 16wks, the agency will not refund any money to the company because the period covered was 10wks. It is in my contract & stupidly I did sign it. I can't belive this is legal - Has anybody been to a tribunal over this & won?

 

[yorkshirejames]

I am being charged an agency fee by my previous employer, I worked for the company for 16wks, the agency will not refund any money to the company because the period covered was 10wks. It is in my contract & stupidly I did sign it. I can't belive this is legal - Has anybody been to a tribunal over this & won?

Please explain this further. I will try to help you if I can. Do you mean that:

-you were offered work via a recruitment agency with their client

-your client was to pay you direct, as an employee

-you resigned after 16 weeks working for this employer

-now this employer is trying to get you to pay the recruitment fee that they owe to the agency?

If so - this would be laughed out of court! But in reality I doubt that it would get that far. Where abouts are you located please?

 

[Richie N]

I am being charged an agency fee by my previous employer, I worked for the company for 16wks, the agency will not refund any money to the company because the period covered was 10wks. It is in my contract & stupidly I did sign it. I can't belive this is legal - Has anybody been to a tribunal over this & won?

No employer can charge the employee the agency fee, as originally stated in the thread you bumped!!

 

[Allie32]

The job was advertised on the internet by an agency, I applied by sending my cv which was sent to the employer, I had an interview & got the job. My contract was with the employer not the agency, I was not 'signed on' with this agency. The agency charged a fee £2250 +vat. My contract states if I leave within 12mths I have to pay a portion of the agency fee. So they are charging me £1725. They have taken £875 already by not paying my final wage & there is a clause in my contract saying they can take any monies owed out of my wage. I have written a letter stating this is the imposition of a penalty & unlawful under Unfair Contract Terms, they have now replied referring me to a case in which it was held as recovery of costs & I must pay the balance £850. I am in Bradford, West Yorkshire & this case took place at Bradford County Court, I have sent them an email asking for a copy of it.

 

[yorkshirejames]

The job was advertised on the internet by an agency, I applied by sending my cv which was sent to the employer, I had an interview & got the job. My contract was with the employer not the agency, I was not 'signed on' with this agency. The agency charged a fee £2250 +vat. My contract states if I leave within 12mths I have to pay a portion of the agency fee. So they are charging me £1725. They have taken £875 already by not paying my final wage & there is a clause in my contract saying they can take any monies owed out of my wage. I have written a letter stating this is the imposition of a penalty & unlawful under Unfair Contract Terms, they have now replied referring me to a case in which it was held as recovery of costs & I must pay the balance £850. I am in Bradford, West Yorkshire & this case took place at Bradford County Court, I have sent them an email asking for a copy of it.

No way. I divide my time between London and Leeds - if what you say is true I will say that I am happy to try to help you with this. Employers who treat people like sh*t really get my goat. I've PM'd you my contact details - please get in touch.

 

[mrfantastic]

I was offered a better post at interview and now my emplyer to be & recruitment agency cannot agree the fee/etc and my terms of employment....what do I do?

 

[Richie N]

Your post has been answered on a thread you started yourself, no need to resurrect an old thread

 

[craig d]

Hiya, im having a similar problem at the moment and dont know what to do. A recruitment agency sent my cv to my employer and i took up thier job offer. i signed a contract with my employer to say that i understood they were paying an agency fee and that if i left within three months would be responsible for that. i signed the contract as i did not intend to leave but have since been made a better offer. i was honest with my current employer and sat down with them to ask what thier position would be and they basically said that they would sue me for loss of the fee and also loss of the business i would generate by staying with them.
i would have been tempted to stay had they done it differently but now feel bullied and threatened and dont feel i can continue to work there.
no once will give me a straight answer about a)whether the agency will refund the fee as i have only been there for 5 weeks and b) whether they can take legal action against me.
Help!