Placement fee disputes and APSO's resolution service
How a South African recruitment agency can take a placement fee dispute to APSO, when APSO will adjudicate, and which records to have ready.
By Achekam · · 4 min read · For Recruitment businesses in South Africa
The candidate started on the first of the month and the placement invoice went out the same week. Sixty days later it is still unpaid. When the consultant finally gets the client's financial manager on the phone, the story changes: the candidate came through a referral from a staff member, the client says, not through the agency, so no fee is due. Or the client accepts the introduction but disputes the salary the fee was calculated on.
Fee disputes are part of agency life in South Africa, and most are settled with a phone call and a copy of the terms of business. Some are not. For those, the Association of Personnel Service Organisations offers a route short of litigation. This article explains what APSO's codes cover, when its dispute service will step in, and how to prepare the evidence.
What APSO's codes cover, and what they leave alone
APSO says all its member recruitment and staffing agencies are bound by its Code of Ethics and Codes of Professional Practice. It also says it does not impose restrictions on the services members offer or on the fees they charge and the guarantee periods they give their clients. APSO describes its code as guidance on legal compliance, professional practice and the minimum service levels members owe clients and candidates; the current Codes of Professional Practice are dated October 2020.
That second point shapes every dispute. APSO does not set a standard fee or a standard guarantee period. What the agency is owed depends on what the agency and the client agreed. If the terms of business are vague, unsigned or never sent, the agency's position is weak no matter how good the placement was.
For context only, Investopedia says independent recruiters are often paid on contingency, earning a fee only if their candidate is hired, with a typical fee of 20% to 30% of the new hire's total first-year salary. That is a general figure, not an APSO rule and not a South African benchmark; in a dispute, only your agreed terms count.
The fee dispute service and who can use it
APSO offers a fee dispute resolution service to its members and members' clients at no cost. It will generally only adjudicate where both parties are APSO members. Otherwise, APSO says, the non-member and the client must first agree to abide by APSO's Code before it will step in.
In practice, that leaves two situations:
| The parties | What APSO says |
|---|---|
| Agency and client are both APSO members | APSO can adjudicate |
| Either one is not a member | APSO generally will not adjudicate unless the non-member and the client first agree to abide by its Code |
APSO's fee disputes page describes the service between recruitment agencies and their clients and when it will adjudicate. Read it before suggesting APSO to a client, so you can explain the process accurately.
When the client is not a member
Most clients are employers rather than recruitment agencies, so the second row of the table is the common case. A client who disputes a fee is not always keen to submit to a process it has never heard of. A few approaches help:
- propose APSO's service early, as a neutral, no-cost alternative to lawyers, before positions harden;
- explain that agreeing to abide by the Code means both sides accept the same standards, not that the client concedes the fee;
- put the proposal in writing and keep the client's reply.
If the client refuses, the agency is back to negotiation or its other legal options, and the quality of its records matters even more.
The evidence that wins fee disputes
Disputes are decided on documents. Before contacting APSO or the client's legal adviser, assemble:
- Signed terms of business, showing the fee basis, when the fee is earned, the payment terms, the guarantee period and rebate terms, and how long an introduction remains valid.
- Proof of introduction: the e-mail or message that first sent the candidate's CV to the client, with its date.
- Interview and offer records: invitations, feedback and the offer the client made.
- The placement invoice, showing exactly what the fee was calculated on; see showing the fee basis on the invoice.
- A statement of account, showing what is owed and for how long.
- Correspondence about payment, including reminders and the client's replies.
If the client's argument is that the candidate left early, the rebate terms are central; see rebates when a placed candidate leaves early.
Producing and sharing the records in Achekam
Several of those records can come straight from Achekam.
Signed terms. Any document can be sent for electronic signature, with signature and initials fields, signers in order or all at once, an expiry and reminders. The signed PDF and a completion certificate are filed back into Documents. An agency that sends its terms of business this way before every new client's first vacancy will not have to argue later about whether the terms were accepted.
Statement and ageing. The server produces a customer statement of account as a PDF that can be e-mailed, and the screen says whether it was sent. Receivables are aged into 0-30, 31-60, 61-90, 91-120 and over 120 days, with overdue totals, which shows how long the fee has been outstanding.
Sharing the bundle. Rather than attaching a dozen files to an e-mail, the agency can share a document by e-mailing a personal link with an expiry, an optional one-time code, and download allowed or not. The share can be revoked. Give APSO or the client's representative a link that expires once the matter is likely to be decided, and keep a note of what was shared and when.
Take your current terms of business out today and check that they state, in plain words, when a fee is earned and how long an introduction lasts; those two sentences settle most disputes before they start.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
