Problem: Recruitment agency suing for hiring fixers after a construction project was completed
I am the commercial director of a large plastering company, carrying out contracts all over the UK. Although we directly employ a fairly large labour force, from time-to-time we also have to use recruitment agencies for the supply of operatives.
In early 2017, we employed 4 fixers from a recruitment agency to work on a contract in Cardiff. It was the first time that we had used this recruitment agency and at the time we were quite desperate to get fixers on the project. After about 6 months, we laid all the fixers off, but a few weeks later, we took on 2 of the fixers directly, without going through the agency.
Just before Christmas 2017, we received an invoice from the recruitment agency which was for a fee of over £20,000 on the basis that we had directly taken on all 4 plasterers. We wrote back to the agency, but instead of receiving a reply, in March we received a court summons for the invoice amount plus court fee and interest. The particulars in the claim form are very basic and essentially refers to the invoice as evidence of the monies due. Any advice?
Response: Construction recruitment law advice
You have not mentioned anything about receiving the recruitment agency’s terms and conditions of trading. From experience, recruitment agencies are notorious for being vigilant when it comes to issuing their T&Cs before they even supply any details of personnel, which is understandable as they need to protect their business from clients that may otherwise obtain potential staff without going through the agency.
On this assumption, there will, no doubt, be a clause in the T&Cs that will state a minimum period from an operative working on a construction contract for a client before they can directly approach the operative work without incurring a fee. That said, you would only be liable for the fee for the 2 operatives you employed, not 4.
It does, however, appear that the recruitment agency has not complied with the Civil Procedure Rules’ Pre-Action Protocol, prior to issuing proceedings. The Protocol sets out how a dispute is to be conducted before a claimant issues proceedings, and it is vitally important for both a claimant and defendant to follow the rules otherwise there is a substantial risk that a successful party’s costs may not be recoverable. The objectives of the Protocol are:
- to encourage the exchange of early and full information about the prospective legal claim;
- to enable parties to avoid litigation by agreeing a settlement of the claim before commencement of proceedings; and
- to support the efficient management of proceedings where litigation cannot be avoided
In responding to the Claim that has now been issued, I would recommend that in your defence, you state that the claimant failed to comply with the Courts Practice Direction on Pre-Action Conduct.
From your outline of the matter, it also sounds like that the agency has not properly pleaded its case. The Civil Procedure Rules lays down mandatory requirements as to how a claim (and defence) has to be pleaded, including “…a concise statement of the facts on which the claimant relies…”, and if this is absent, then the claimant will be contravening CPR 16.4. Similarly where a claimant intends to rely on any standard terms as being incorporated in any agreement, 16PD.7.3 states that a claimant must file a copy of the terms with the claim. Your defence, therefore, must reserve the right to amend the defence upon receipt of any further details from the Claimant.
However, do not forget that in all probability, you will owe some monies to the agency because you have directly employed 2 of the operatives. I would, therefore, suggest that you file a defence and at the same time, make an application to the Court to stay proceedings whilst the parties comply with the Protocol, which will then give you an opportunity to reach a settlement without incurring further costs.
© Michael Gerard 2018
The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.