Running an employment agency or business

As an employment business you cannot use transfer fees unreasonably as a means of discouraging or deterring hirers from:

• offering permanent work to temporary workers
• having workers supplied through a different employment business
• introducing workers to a third party to be employed by that party

You can charge transfer fees to hirers to protect your legitimate business interests, in three situations:

1. Temp-to-perm fees - when you have supplied a temporary worker who is then taken on directly by the hiring company.
2. Temp-to-temp fees - if the hiring company changes agency but wants to keep on a temporary worker you supplied, meaning that the worker has to change agency.
3. Temp-to-third-party fees - if the hiring company introduces a temporary worker you supplied to another person that goes on to employ them.

It is unlawful for you to seek to charge a transfer fee (following the supply of a worker) in any other situation. A hirer is entitled to recover any money they have paid for unlawful transfer fees.

Temp-to-perm and temp-to-temp fees

You can charge a transfer fee in temp-to-perm and temp-to-temp situations provided the hirer is given the option to have the worker supplied by you for a specified period of hire, at the end of which the worker will transfer without charge instead of paying the transfer fee.

Where the hirer has opted for a specified period of hire, you must supply the worker for the entirety of that period (unless you are prevented from so doing in circumstances that are not your fault). The supply terms cannot be less favourable to the hirer than those which applied prior to the hirer opting for the specified hire period. In order for a transfer fee to be payable, the transfer of the work-seeker must take place within the 'relevant period'.

The 'relevant period' is whichever of the following periods ends later:

• 14 weeks beginning from the first day on which the worker worked for the hirer having been supplied by the employment business
• eight weeks starting from the day after the day on which the worker last worked for the hirer having been supplied by the employment business

Where there has been more than one assignment care must be taken in calculating the correct start date for the 14-week period. If there was a break of more than 42 days (six weeks) between assignments this will break continuity and the later assignment will be taken as the first assignment. Where there has been a break of 42 days or less this will not trigger the start of a new 14-week period.

Temp-to-third party fees

If you supplied a worker who your client introduced to a third party you can charge a transfer fee following the same principles as a temp-to-perm or temp-to-temp fee - but you do not have to offer the client a choice between the transfer fee and an extended period of hire.

Situations where you introduce but do not supply a temporary worker

If you introduce a worker rather than supply them you can charge a fee - often called an introduction fee.

The fee should follow the same principles as the temp-to-perm and temp-to-temp fees but there is no limit on the period during which such a transfer must occur. The hirer must be given the option to have the worker supplied by you for a specified period of hire, at the end of which the worker will transfer without charge instead of paying the transfer fee. There is no limit on the agreed specified period of hire or the level of the transfer fee.