PandaTip: This sample agreement is for engaging an employment agent/headhunter (i.e a recruiter who finds employees and receives commission for placing them in employment). If you are looking to recruit an employee or consultant directly then you should use an employment agreement, temporary employment agreement or consultancy agreement instead.
Recruitment Strategy Agreement Template
This Recruitment Strategy Agreement (the “Agreement”) sets out the terms and conditions upon which [COMPANY NAME] (the “Company”), being a Company duly registered under the laws of [STATE] with registered number [REGISTERED NUMBER] and having its registered address at [REGISTERED ADDRESS], engages [RECRUITER NAME] (the “Recruiter”), being a Company duly registered under the laws of [STATE] with registered number [REGISTERED NUMBER] and having its registered address at [REGISTERED ADDRESS] as a recruiter for the Company (together, the “Parties”).
What is a recruitment strategy agreement?
A recruitment strategy agreement is a contract between two parties, an employer and a recruitment business, that precisely details the understanding between them, such as responsibilities of each party, the fees involved and other relevant information.
WHEREAS: the main activity of the Company is [ACTIVITY]
PandaTip: In this sample recruitment strategy agreement: ‘the Company’ means the person who will hire the employee and ‘the Recruiter’ means the person who will find the employee (i.e. the employment agent/headhunter).
WHEREAS: the Recruiter locates and provides human resources (HR) in this abovementioned area.
WHEREAS: the Company is desirous of engaging the Recruiter to provide recruitment services on such terms as are set out throughout this agreement and the Recruiter for his part is desirous of being engaged by the Company to provide said recruitment and Human Resources (HR) on said terms.
PandaTip: There is no need to be precise here, more detailed definitions exist in clause 2. This section should include a general description of activity of the Company, for example, “vehicle maintenance”, “medical research”, “software development”, etc.
NOW, THEREFORE, IT IS HEREBY AGREED as follows:
1. DEFINITIONS. In this Agreement:
1.1 “Territory” shall mean [TERRITORY]
PandaTip: If the operations of the recruiter/headhunter is limited to a particular state, country or other geographical area then this fact may be added above (for example “the USA and Canada”). Otherwise choose “anywhere in the world”.
1.2 “Candidate” shall mean any applicant for a Position with the Company.
1.3 “Position” shall mean the role for which the Candidate is being Presented based on the Requirements set out in clause 2 of this Recruitment Strategy Agreement.
1.4 “Requirements” shall mean the requirements provided to the Recruiter by the Company set out in clause 2 of this Recruitment Strategy Agreement.
1.5 “Presentation”, “Presented”, “Present” shall all mean the submission in writing of the Candidate’s particulars to the Company including either his CV or his name or any other information sufficient to uniquely identify the Candidate. The Presentation of a client shall be deemed to have taken place notwithstanding that the Candidate may eventually Sign On for a Position other than that in the contemplation of the Parties at the time of Presentation.
1.6 “Sign On” shall mean the execution of an employment or consultancy agreement between the Company and the Candidate irrespective of its conditions.
1.7 “Termination,” “Terminate,” “Terminates” shall all mean the termination of the employment of the Candidate in any of the following circumstances only: resignation by the Candidate, dismissal for breach of contract, dismissal for gross misconduct, failure of the Candidate to begin employment or consultancy notwithstanding the execution of an employment or consultancy agreement.
1.8 “Another Agent” shall mean any person representing or purporting to represent the Candidate with or without instruction from the Candidate and whether or not doing so for pecuniary gain and whether or not in the business of recruitment or Human Resources (HR).
1.9 “Fees” shall mean the fees set out in Clause 4 of this Recruitment Strategy Agreement.
1.10 Unless it is evident from the context and having regards to the generality of the Agreement that a clause intends to mean otherwise: words denoted in the singular only shall include the plural and vice versa; words denoted in any gender shall include all genders; and, terms denoting people or persons shall include both natural and legal persons (such as corporations) and vice versa.
1.11 The heading names in the Agreement are provided as reference only and do not form part of the Agreement.
1.12 The Agreement may be executed in both English and other languages. If there is a conflict between the agreement in its various translations the English version shall prevail.
1.13 The illegality or unenforceability of any clause (or part thereof) shall have the effect of voiding that clause (or part thereof) only and not the entirety of the Agreement.
1.14 This Agreement may be executed either in one original or in two counterparts.
1.15 The terms of the Agreement shall be deemed to be binding on both Parties based on their respective conduct notwithstanding any error or defect in the execution of the Agreement.
2. PROVISION OF INFORMATION In order to enable the Recruiter to locate suitable Candidates the Company will promptly provide the following information to the Recruiter:
2.1 An executive summary of the Company including its areas of operation, samples of their work etc.
2.2 A detailed description of the Position including salary, benefits, conditions of employment, place of work and any other relevant considerations.
2.3 A detailed description of the desired applicant.
2.4 A copy of their human resources (HR) policy, if any.
2.5 A sample employment contract detailing the terms on which the Candidate would be engaged.
PandaTip:If you wish to add anything to the list of information that the Company will provide to the Recruiter you can do so by including extra sub-clauses here.
The performance by the Recruiter of its obligations under this Agreement is conditional upon receipt of the above and changes in these requirements must be notified in writing as soon as practicable.
3. OBLIGATIONS OF THE RECRUITER The Recruiter will use its best endeavours to locate a suitable Candidate and Present this Candidate to the Company. The Recruiter will use its skill, experience in recruitment and human resources (HR) as well as industry knowledge to locate, screen, interview and test Candidates. The Recruiter may undertake searches for Candidates directly or may outsource this role to third-parties or networks. Specialist tests such as drug-testing, background-checks and credit-checks are not performed by the Recruiter.
4. FEES In consideration of its services under the Agreement the Company agrees to pay the Recruiter ::Fee:: such fee being payable within 30 days of becoming due. The above fee is due net of any and all local taxes, charges and all other deductions.
PandaTip: This is the most important clause in this recruitment strategy agreement and it is the most likely to be disputed so it is important to draft it very clearly. Is the recruiter/headhunter paid a fixed fee or a percentage? Or perhaps it has elements of both? Is the recruiter’s fee (or any part of it) conditional upon the Candidate staying in the role for a given time? Is the payment due to the headhunter even if no Candidate is found? We include examples: the sum of USD 10,000 (ten thousand dollars) at Sign On; 15% of the Candidate’s annual salary at Sign On; the sum of USD 5,000 (five thousand dollars) payable on signing of this Agreement and 20% of the Candidate’s annual salary at Sign On; the sum of USD 10,000 (ten thousand dollars) at Sign On and 20% of the Candidate’s salary once they have spent six months in employment with the Company.
5. OUT OF POCKET EXPENSES In addition to the fees outlined in clause 4 the Company undertakes to pay, reimburse and to indemnify the Recruiter against all reasonable costs, overheads and out-of-pocket expenses incurred by the Recruiter within the scope of and during the operation of the Agreement provided always that any such expenses are approved by the Company in writing before they are incurred and that documentary evidence of the payment of said costs and their bona fide nature is presented promptly.
PandaTip: If you wish to exclude the Recruiter/Headhunter from being able to reclaim expenses then remove this clause and replace it with one stating: “5. The Company expressly excludes the payment of any and all costs, overheads or out-of-pocket expenses by the Recruiter which shall be borne by him/her solely.”
6. APPLICATION VIA ANOTHER AGENT AND DIRECT APPLICATION It is agreed that:
6.1 The Recruiter’s Fees are still payable notwithstanding the subsequent Presentation of the Candidate to the Company by Another Agent.
6.2 The Recruiter’s Fees are still payable notwithstanding the subsequent application of the Candidate to the Company directly.
6.3 The Recruiter’s Fees are not payable if the Candidate had already been Presented to the Company (directly or by Another Agent). The Company therefore undertakes to inform the Recruiter within seven (7) days of learning the Candidate’s name if that Candidate had already been Presented directly or by Another Agent. Failure to comply with this requirement shall constitute a waiver of rights under this clause by the Company.
6.4 Nothing in this clause shall affect the provision of Clause 5.
7. TERMINATION OF CANDIDATE In the event of Termination within sixty (60) days of the Candidate commencing Employment the Recruiter shall:
PandaTip: If you wish to alter the number of days the Candidate must remain in employment please alter the above clause.
7.1 Provide another Candidate at no extra cost to the Company; or,
7.2 If no suitable new Candidate can be found then the Company shall not be liable for the payment of fees under Clause 4 (and shall refund said fees if they are already paid). This clause shall not affect the provisions of Clause 5.
PandaTip: If fees are due to the Recruiter/Headhunter even if the candidate quits then this clause must be changed to reflect this. For example. 7.2 If no suitable candidate can be found then the Company shall only be liable to pay x.
8. DURATION The Agreement shall commence on the date of its execution and shall have effect until any of the following occurrences at which point the Agreement will end:
8.1 the failure of the Company to pay any fees due under this Agreement within 60 (sixty) days of them falling due provided that such delay was not expressly agreed between the Parties.
8.2 The provision of 14 (fourteen) days’ notice in writing by either Party.
PandaTip: If you wish to change the amount of notice of termination under this recruitment strategy agreement or allow for different notice periods whether or not notice is provided by the Company or the Recruiter/Headhunter you can do so by changing the above clause.
8.3 The passing of 180 (one hundred and eighty days).
PandaTip:If you wish this recruitment strategy agreement to last less than 180 days, or to continue indefinitely you can amend or delete this sub-clause.
9. WARRANTIES AND INDEMNITIES
9.1 Both Parties warrant that they have the necessary power and approval to enter into the Agreement.
9.2 Both Parties warrant that they are not aware of anything in their reasonable control which will or could have an adverse effect upon their ability to perform their respective obligations under the Agreement.
9.3 The Recruiter acknowledges that he/she does not have the right to bind the Company.
9.4 The obligations and benefits under this Agreement may be assigned by either Party provided that the other Party first agrees in writing to said assignment.
9.5 The failure or delay by either Party to enforce any term of this agreement or to act upon a breach of any term shall not constitute a waiver of their rights with the express exception of those rights in clause 6.3.
9.6 Both Parties warrant that they will not do anything to hinder or adversely affect the execution of the other Parties’ duties under the Agreement.
9.7 Both Parties warrant that they will submit to the exclusive jurisdiction of the courts and legal system stated in clause 13.
9.8 The Company accepts that the Recruiter is not liable for (and agrees to hold him/her harmless for) any losses arising out of:
9.8.1 Any deception, misrepresentation, fraud or fraudulent statement by the Candidate howsoever made and whether by act, conduct or omission.
9.8.2 Any loss howsoever arising caused by the Candidate acting under employment to the Company including losses due to negligence or gross-misconduct.
9.8.3 Any loss caused by the Candidate failing to take up employment as agreed.
10. CONFIDENTIALITY It is agreed that:
10.1 The Recruiter shall ensure that any confidential information or material which is obtained during the scope of this Agreement or in negotiation thereof is kept confidential including but not limited to the details of the Position and the proposed salary thereof.
10.2 The Company shall ensure that the details of the Candidate are kept confidential at all times and undertakes not to share this information with any third-parties.
10.3 The Recruiter undertakes that he shall not expose any confidential information except with the prior written consent of the Company or if directed to do so by a competent Court provided always that such information has not previously entered the public domain by other means.
10.4 The terms of clauses 10.1, 10.2, 10.3 shall apply indefinitely notwithstanding the termination of this Agreement.
11. VARIATION Any variation to this Agreement shall be made in writing and signed by both Parties.
12. NOTICES Any notice served under this Agreement shall be made in writing and shall be considered served if it is handed to the other Party in person or delivered to their last known address or any other such address as the Party being served may have notified as his address for service. All notices shall be delivered in English.
13. GOVERNING LAW, DISPUTES AND ARBITRATION It is agreed that:
13.1 The Agreement is made under the exclusive jurisdiction of the laws of [STATE].
13.2 Disputes under this Agreement shall be subject to the exclusive jurisdiction of the courts of [STATE].
13.3 Notwithstanding the terms of 13.2 both Parties agree that in the event of a dispute they will enter into arbitration before the International Chamber of Commerce before a single arbitrator whose decision shall be final.
PandaTip: If you do not wish to include the right to arbitration, or if you wish to choose a different arbitrator then please delete or amend this clause. Arbitration is a private arrangement (unlike a legal case) and is sometimes included to demonstrate to the Parties that they will not be able to achieve any benefit by threatening to sue but must rather be willing to go through a fair arbitration hearing.
IN WITNESS WHEREOF, each of the Parties has executed this Agreement:
[NAME], [TITLE] DATE
[NAME], [TITLE] DATE