SAMPLE AGENCY AGREEMENT CLAUSES TO MITIGATE

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SAMPLE AGENCY AGREEMENT CLAUSES TO MITIGATE RECRUITMENT-RELATED

RISK:

A PRACTICAL RESOURCE FOR EMPLOYERS

Employers of foreign migrant workers are increasingly using contract clauses, in part, to ensure

their third-party recruitment agents adhere to commitments to ethical recruitment and to

underpin the effective implementation of an Employer Pays

recruitment policy.

This document presents sample clauses extracted from actual sending-country agency

agreements reviewed by Verité during CUMULUS screenings, audits, consulting, research and

other engagements in the supply chains of leading multinational companies. The sample

clauses presented here represent a current, practical standard for suppliers and employers

using commercial agreements to mitigate recruitment-related forced labor risks in the supply

chain. Employers can adapt these sample clauses to supplement and strengthen their own

agency agreements. Some are composites based on similar clauses in agreements that span

sectors and migration corridors. Others have been translated and edited for clarity. The clauses

presented here do not represent an exhaustive list and each clause is only effective if

incorporated into legally enforceable agreements.

While every effort has been made to ensure the accuracy and reliability of information

presented below, Verité makes no representations about their enforceability in specific

jurisdictions. The inclusion of these sample clauses does not constitute legal advice, nor are

they intended to replace formal consultation with a legal professional.

I. PERFORMANCE CLAUSES

1. AGENT agrees to provide COMPANY with recruitment-related services which include,

without limitation, the following:

a. Recommending the most effective advertising media to attract suitably qualified

candidates for each recruitment drive, and following COMPANY approval,

placing of advertisements.

b. Recruitment of a sufficient number of suitably qualified candidates to meet

COMPANY’s demand using multiple sources including, but not limited to,

advertisements and job postings, AGENT’s existing database, website, social

media, referrals, and recruiting events.

Employer Pays means the employer pays all recruitment fees and related costs, as defined by the ILO

[

https://www.ilo.org/global/topics/labour-migration/publications/WCMS 536755/lang--en/index.htm], and that

workers are not charged fees or costs at any point during the recruitment process.

Agency obligations, representations, and warranties are often included in this section.

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c. Receiving, storing, and reviewing candidate materials including completed

application forms, CVs, passport details, and relevant qualifications or

certificates.

d. Screening applicants against the job description and candidate specification

including by conducting initial interviews, trade tests, reference checks, and

verifying qualifications or credentials.

e. Present COMPANY with candidate summaries and a recommended shortlist of

fully vetted suitably qualified candidates for final interview.

f. Arrange, coordinate, and support COMPANY interviews of final candidates

including providing all necessary facilities to COMPANY.

g. Presenting COMPANY selected candidates with a written employment contract,

in the local language, duly signed by an authorized representative of COMPANY

and answering candidate questions.

h. Facilitating pre-employment medical examinations and vaccinations, required

government clearances, pre-departure orientation, and visa processing for

selected candidates that accept COMPANY’s offer of employment.

i. Make travel arrangements for selected candidates that have successfully

completed pre-departure processing.

II. PAYMENT CLAUSES

1. AGENT shall invoice COMPANY for recruitment/placement/introduction fees in

accordance with the following schedule:

20%

Upon signed contract of employment or acquisition of calling visa

30%

Day of departure

50%

Upon workers arrival at COMPANY workplace

a. COMPANY shall be entitled to withhold 50% of the agreed

recruitment/placement/introduction fees where there is a reasonable suspicion

that workers have been charged recruitment fees or related costs contrary to

the terms of this agreement. The balance will only be released when AGENT has

reimbursed workers or a thorough investigation uncovers no evidence that

workers were charged.

b. Approved fee invoices will be paid by COMPANY within 30 days of receipt and

acceptance.

2. COMPANY shall reimburse AGENT for all agreed and approved direct recruitment costs

paid by AGENT on COMPANY’s behalf.

a. AGENT invoices for reimbursement of direct costs shall include proof of payment

to third parties.

b. Approved direct cost invoices will be paid by COMPANY within 30 days of receipt

and acceptance.

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III. RIGHT TO WITHHOLD AGENCY PAYMENT CLAUSES

1. COMPANY may withhold payments to AGENT when:

a. AGENT has failed to perform, in whole or in part, any of its obligations under this

agreement; and/or

b. COMPANY has reason to believe that workers have been charged recruitment

fees and related costs by AGENT, or its subagents or service providers, during

the recruitment process contrary to the terms of this agreement.

2. If COMPANY has reason to believe that specific workers have been charged recruitment

fees and related costs in breach of this agreement, COMPANY may only withhold the

proportionate amount of the invoice related to those workers for the period after the

violation occurred and until it is cured or remedied by AGENT.

3. If COMPANY determines that cause exists to withhold payment to AGENT, COMPANY

shall, within fifteen (15) days of this determination, provide AGENT with written notice

that COMPANY is withholding payment. The notice shall describe the reasons for the

withholding and the amount to be withheld. AGENT will have thirty (30) days from the

date of receipt of such notice to take all necessary and appropriate action to correct the

breach, otherwise payment will be denied.

4. In the event AGENT fails to correct the breach, COMPANY shall be further entitled to

withhold the equivalent of USD_______ per worker as liquidated damages.

The parties

agree that if AGENT fails to provide remedy to workers, based on available data from

credible third-party sources, this is a reasonable, good faith estimate of the amount of

recruitment fees and costs that COMPANY will need to reimburse workers that have

been charged contrary to the terms of this agreement. AGENT and COMPANY agree

that the estimated liquidated damages are not a penalty.

5. AGENT understands and acknowledges that if workers are charged recruitment fees and

related costs by AGENT, or its subagents or service providers, during the recruitment

process it will cause serious and irreparable damage to COMPANY, the amount of these

damages being difficult to estimate and prove, which is why AGENT accepts that in the

event of a breach of this obligation in the agreement it shall pay damages

to COMPANY

in the amount of USD_______.

This is a liquidated damages clause.

This is a penalty clause. Penalty clauses may not be enforceable in common law jurisdictions.

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IV. AGENCY WARRANTIES AND REPRESENTATIONS CLAUSES

1. AGENT acknowledges, represents, and warrants that it will provide the services to

COMPANY and fully discharge its responsibilities under this agreement and that its

compensation shall consist exclusively of the recruitment fees and related costs payable

by COMPANY.

2. AGENT acknowledges, represents, and warrants that it will not, under any

circumstances at any time, solicit, levy, collect – directly or indirectly – any recruitment

fees or related costs from any candidate applying for a position with COMPANY.

3. AGENT acknowledges, represents, and warrants that it shall be liable if any employee,

subagent, intermediary, or service provider of AGENT solicits, levies, or collects any

recruitment fees or related costs from any candidate applying for a position with

COMPANY at any time during the recruitment process or thereafter.

4. AGENT acknowledges, represents, and warrants that if candidates applying for a

position with COMPANY are directly or indirectly charged recruitment fees and related

costs at any time during the recruitment process or thereafter, AGENT shall be

responsible for fully reimbursing applicants and workers.

5. AGENT acknowledges, represents, and warrants that if candidates for a position with

COMPANY are charged recruitment fees and related costs in breach of this agreement,

and AGENT fails to cure the breach within ___calendar days, COMPANY shall be entitled

to withhold payments due to AGENT in respect of the services. Company shall be further

entitled to setoff and deduct from any amounts owed to AGENT pursuant to this

Agreement all damages and expenses incurred due to AGENT’s breach of this

Agreement, following any applicable cure periods, and provided such party has given

notice of its intention to apply a setoff prior to making the payment deduction. These

rights shall be cumulative and may be exercised successively or concurrently, in addition

to any other available remedies.

V. AGENCY GUARANTEE CLAUSES

1. In the event the employment of a candidate recruited under this agreement lasts less

than ___ calendar days, except in the case of redundancy or reduction in force, where

all recruitment fees and related costs have been paid or reimbursed by COMPANY, and

COMPANY notifies AGENT in writing of the termination within ___ calendar days,

AGENT will provide a suitably qualified replacement candidate for the same position at

no additional charge to COMPANY.

These are sometimes included in agency responsibilities or performance clauses.

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2. In the event AGENT fails to provide a suitably qualified replacement candidate

acceptable within ___ calendar days of written notification of termination, COMPANY

shall be entitled to a full refund of the recruitment/placement/introduction fee.