Recruitment Agency Liquidation | Make Sure You Are Protected

recruitment agency liquidation
Agency Liquidation - What to do When Your Agency Goes Bust

Recruitment Agency Liquidation


When a recruitment  agency liquidation happens a contractor should have made sure that he, or she, is protected through contract clauses.

If a rexruitment agency liquidation does actually happen, the contractor must move quickly.

If they don’t then they could get shafted.

Check Contract Terms

Be aware of your contract terms.

Don’t go to sleep reading it. Don’t put it off until tomorrow.

Read it, understand it and if it suffers from any of the problems that I have outlined, take steps to fix it.

It is better to fix it now and not lose money than to wait for the inevitable and lose money, your job and your hair!

Things to avoid in your contract

Anti solicitation

. This might be difficult to negotiate, but if you can avoid any clauses where you can not work for the client for up to 6 or 12 months after contract termination then it would be a good thing to avoid.

Woolly payment terms

(i.e. “7 days from receipt of invoice in accordance with our invoicing schedule” – the schedule is up to them! which makes it difficult to know if they are late payers)

Ongoing clauses

that continue to be in effect after termination (like anti solicitation clauses)

Things to have in your contract

Insolvency clause

  • In the case of insolvency, you need immediate release from all conditions of the contract.

Very specific payment terms

(i.e. “5 business days from the date of the invoice”), so you can determine a material breach without ambiguity.

Late payment penalties

  • You should review your contract to ensure that provision is made for late payments and impose financial sanctions if payment is made outside this time frame. You are entitled to do this under the European Communities (Late Payment in Commercial Transactions) Regulations 2002.

Termination clauses

with specific mention of what happens if there is a material breach (i.e. non payment). You must be immediately released from all obligations under these circumstances.

Precautions to Take for Recruitment Agency Liquidation

Don’t complete timesheets in any form until the last possible moment

If the client has self billing (where the act of entering a timesheet online allows the agency to raise an invoice for your time) avoid it if at all possible

Assuming that you have to complete some paperwork before you send an invoice (i.e. agency timesheets, client timesheets, project timesheets, etc.), then do it all at once, not in dribs and drabs.

In the event of insolvency, the liquidator will examine any records that they can lay their hands on to try to get hold of money that they believe belongs to the agent.

Don’t allow them that opportunity.

If a recruitment agency liquidation happens you will have to move quickly and wisely.

If you don’t….

agency liquidation
Agency Liquidation – What to do When Your Agency Goes Bust


Please enter your comment!
Please enter your name here