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I have been working with this client for 3 years and recruited a number of permanent staff for them (recently there has been changes in their management). A month ago I submitted a candidate cv to the hiring manager, at the time they had no vacancies. Last week I spoke with my candidate who informed me that she had an interview with the same client the week before and accepted an offer via another recruitment agency!

Our Terms and conditions state: An introduction fee will be charged in relation to any Candidate engaged as a consequence of or resulting from an introduction, whether direct or indirect, within six months from the date of our introduction.

Therefore my thought process is I introduced the candidate first to the client and she has been engaged within 6 months of my submission so I should be entitled to a fee?

One of the managers from my client contacted me and advised I am not entitled to a fee for this candidate as there was no vacancy at the time & it was unsolicited.

I have consent from the candidate and email trails advising her where her cv has been submitted & the client confirmed they received her details from the other agency after me

Any advise or help on this would be appreciated.

  • What does your contract say regarding the client's argument that "there was no vacancy at the time & it was unsolicited"? Also, specifically what prompted you to submit the candidate's CV there? – Iñaki Viggers May 16 at 10:30
  • Nothing in our contract on no vacancy / unsolicited, In March 2019 the hiring manager gave me 3 vacancies to work on, at the time I filled one and thought they would require more candidates.. – ZacRec May 16 at 11:23
  • The thing is that one needs to know more about your contract with that client in order to elaborate an analysis under contract law. Although the contract does not have an explicit clause on unsolicited candidates, other parts thereof might help ascertain whose position is more consistent with the contract. Also, I assume that you (or your company) drafted the contract, which will be relevant in case of any relevant ambiguities in the contract. – Iñaki Viggers May 16 at 12:19
  • Any way I can post the terms on here? – ZacRec May 16 at 12:28
  • At least the relevant portions. A few users will rush to downvote/VTC you and reprimand/tell you that LawSE is "not for legal advice", but a useful answer really needs enough detailed question. Otherwise, you and other genuine readers are left clueless about how contract law is applied in non-trivial controversies. This does not mean that a contract always indicates how to decide any controversy, but its details might help. – Iñaki Viggers May 16 at 12:41
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You are probably entitled to the fee - at least, you would be in NSW. However, pressing this is likely to lose you a long term client.

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According to the terms of the contract, you are entitled to the introduction fee merely by "the passing to the Client of a CV or information which identifies the Candidate and which leads to an Engagement of the Candidate". This is tantamount to a clause of unsolicited candidates which I inquired about, since it is worded as an alternative to the condition of "following the Client's instruction [...] to search for a Candidate".

Although you (or your company) drafted the contract, the doctrine of contra proferentem would not benefit the client in this matter because not every set of alternative conditions amounts to an ambiguity. In this case, the client knew that fees would ensue from any of the two conditions listed in the contract: by client's instruction, or by the mere passing of the CV if it resulted in a hire. Otherwise, a client would systematically avoid the introduction fee by clinging to "the other alternative", thereby leading to an absurdity.

There are two factual scenarios where the client would not be subject to the introduction fee. One scenario is if the client --by some reasonable way-- signaled you not to submit more candidates prior to you sending them this candidate's CV.

The other scenario consists of the client's or candidate's proof that your involvement was not indispensable for their current relation. This scenario is somewhat typical because very often one same position is --or similar/related positions are-- advertised by multiple recruiters roughly simultaneously. That redundancy among recruiters can complicate proving that your recruitment efforts were the actual cause of a professional relation between the company and the candidate.

I am mindful of your statement that

the client confirmed they received her details from the other agency after me

although that by itself does not necessarily rule out the possible effect of the aforementioned redundancy.

Lastly, the company could advance the viable argument that a pattern of you submitting to it unsolicited candidates amounts to you having a monopoly (in the sense of locking those introduction fees). That would contravene the contract law covenant of fair dealing. However, it is unclear from your question whether there is any such pattern.

  • Thanks for the info! There isn't a pattern of unsolicited candidates. Do you think I have a case to make a claim for the fee or should I just let it be? – ZacRec May 17 at 7:11
  • @ZacRec I can only highlight the legal merits of what you describe (and it seems you have a case). The rest is totally up to you because you know your clients, business, and risks better than I. For instance, you are in a better position than I to conjecture whether your leniency in this instance would restore your status with that client or whether the controversy has de facto alienated him already. Why did the client move forward with the other agency on this candidate? If you show leniency, are you confident that the situation will not repeat (or has not occurred) with other candidates? – Iñaki Viggers May 17 at 11:01
  • This is the response I received from client: – ZacRec May 27 at 12:27
  • My understanding was that the candidates information was unsolicited, not retained by us, and sent at a time when no vacancies were lodged with your agency. We were not therefore in any contractual relationship. It is difficult to see how you can impose terms on us unilaterally and when no contract exists between the parties Perhaps you could provide more information, setting out the basis for your claim? – ZacRec May 27 at 12:28
  • @ZacRec See the 1st paragraph of my answer. The "or" disjunction connects two conditions (arguably alternatives). Of these two conditions, only the 1st is premised on "following the Client's instruction [...] to search for a Candidate", whereas your claim is premised on the 2nd one, the one that does not allude to such instruction. Had these conditions be in reverse order, one might argue that both premises are bound by "following the Client's instruction". And based on your description, I see no indication that your contract was inexistent or properly terminated as your client purports. – Iñaki Viggers May 27 at 13:02
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Your client screwed you.

Whether they breached the contract or not is a debate that could be settled court, but that doesn't really matter. Your client still screwed you.

Your immediate options are:

  • Let by-gones-be-by-gones. This fee is gone. Continue to send the client qualified candidates, and put all terms and expectations in clear writing from this point forward. Collect future fees.
  • Drop the client. Don't refer any more candidates there. Refuse to take their calls. Mention to other agencies and recruiters what happened, and let them decide for themselves if they want to work with this client.
  • Pursue the fee via legal means, and almost certainly lose the client.

It seems the least productive option is to pursue the fee via legal means. It is uncertain if you would win; it would be slow and costly; it would give you a bad reputation; and you'd lose the client no matter what.

So you really have to choose between the other two: Either drop the client for good, and maintain the moral high-ground, but lose any future fees, or let this one fee go, and collect future fees.

Because you've worked for this client for several years, and generally it has been productive and beneficial, I'd suggest you just let this placement go, and be more careful about future placements.

But if you want to maintain the highest level of professional integrity, no one would blame you for dropping this client permanently.

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