The pressure to sign contracts which include potentially dangerous clauses is definitely on the increase. So how can recruiters combat this pressure from clients?

An Association of Professional Staffing Companies (APSCo) members meeting last week discussed the issue of resisting pressure to sign non-standard liability clauses. These are clauses within a contract that often cannot be indemnified against, such as indirect consequential losses, where the company claims loss of profit as a consequence of an action, even though not directly resulting from the staffing provider.

Jim Allison, managing director of Allison & Partners, insurance services provider for the recruitment sector, said the client’s objective was “to pass on as much liability to the agency as possible”, taking advantage of their position of strength in today’s employment market.

Frances Lewis, partner from Blake Lapthorn solicitors, gave an example of a recruiter which was legally obliged to continue supplying staff, despite the fact that the client was going into administration and couldn’t pay.

Dawn Marriott-Sims, managing director of Capita Resourcing, spoke from Capita’s position of “both gamekeeper and poacher”. She believed the pressure to sign was nothing new. “There has always been pressure to sign up to unreasonable terms. Recruiters are pushing back [on terms and conditions] all the time. As IT recruitment providers, clients still give us unreasonable contracts.”

And from an recruitment process outsourcing (RPO) viewpoint, she added that if one of Capita’s providers returned their contract signed the following day (with the implication that it wasn’t looked through properly), “that also raises concerns as to whether we’ve got the right recruiter”.

Many recruiters take the view that RPOs can be seen to be passing the buck of liability down the line to their recruitment providers. Miles Stribbling, managing director of Resource Solutions, part of Robert Walters Group, believed that recruiters should never take on a liability that could harm their business.

So how can recruiters push back on non-standard clauses, without relinquishing the contract? One suggestion from the panel was to only agree to accept liabilities that were insurable.

“Carve out what clauses you can and cap what you can’t,” Lewis suggested. “There are a number of new MSPs out there that are squeezing their suppliers and aren’t as professional as the RPOs in this room.”

Ann Swain, APSCo chief executive, warned APSCo members: “There are more desperate people agreeing to more desperate measures. But when the time comes to sell on the business, no one will want to take on contracts that can’t be insured.”

One possible weapon that could prove useful in recruiters’ armoury may come from APSCo itself. Swain suggested that its website should have clear guidelines for members to refer to, detailing that they would not be able to sign up to contracts that are negligent.

“You should be able to say ‘no’ to contracts that could damage your business,” she said. “And this should form the argument: ‘My Trade Association says I can’t sign up to such and such a clause or we’ll be kicked out’.”

If this promise comes to fruition, it seems APSCo members at least will be able to shore up their defences against the client bullies.