Recruitment Agreement (Canada)
This Recruitment Agreement (the "Agreement") is entered into as of [Effective Date] by and between:
[Agency Name], with its principal place of business at [Agency Address], [Agency City], [Agency Province] [Agency Postal Code], Canada, email: [Agency Email], phone: [Agency Phone] (the "Agency");
and
[Client Name], [Client Type], with its principal place of business at [Client Address], [Client City], [Client Province] [Client Postal Code], Canada, email: [Client Email] (the "Client").
The Agency and the Client are collectively referred to as the "Parties" and individually as a "Party".
RECITALS
WHEREAS the Client wishes to engage the Agency to provide recruitment and staffing services for the purpose of identifying, screening, and presenting qualified candidates for employment positions within the Client’s organization;
WHEREAS the Agency is in the business of providing professional recruitment services and holds all required licences and permits, including compliance with Part XVIII.1 of the Ontario Employment Standards Act, 2000 where applicable;
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. SCOPE OF SERVICES
1.1. The Agency agrees to provide [Recruitment Type] services to the Client on a [Exclusivity] basis for the following types of positions: [Position Types].
1.2. The services provided by the Agency shall include: [Recruitment Services].
1.3. The Agency shall exercise professional diligence in identifying, screening, and presenting qualified candidates. The Agency does not guarantee that a candidate will be found or that a placement will be made.
1.4. Background checks: [Background Check Consent]. All background screening activities shall be conducted in compliance with PIPEDA and the applicable provincial privacy legislation, and only with the written consent of the candidate.
2. FEES AND PAYMENT
2.1. Fee Structure: The Client agrees to pay the Agency a fee calculated as follows:
Fee Calculation Method: [Fee Type]
Fee Amount: [Fee Percentage] [Flat Fee Amount] [Hourly Rate]
2.2. The Agency’s fee becomes payable upon the candidate’s acceptance of the Client’s offer of employment and commencement of work (or upon assignment for temporary staffing). The Agency shall issue an invoice within five (5) business days of the placement event.
2.3. Payment Terms: All invoices are due and payable within [Payment Terms Days] days of the invoice date. Late payments shall bear interest at a rate of 1.5% per month (18% per annum), or the maximum rate permitted by the Criminal Code of Canada (s. 347), whichever is less.
2.4. Applicable Taxes: All fees are exclusive of applicable taxes. The Client shall pay [Tax Note] on all fees, as required by the Excise Tax Act (R.S.C., 1985, c. E-15).
3. GUARANTEE PERIOD
3.1. The Agency provides a guarantee period of [Guarantee Period Days] days from the placed candidate’s start date (the "Guarantee Period").
3.2. If the placed candidate voluntarily resigns or is terminated for cause by the Client during the Guarantee Period, the Agency’s remedy shall be: [Guarantee Remedy].
3.3. The guarantee does not apply if: (a) the Client materially changes the position’s terms, compensation, or working conditions after placement; (b) the Client terminates the candidate without cause; (c) the Client fails to pay the Agency’s fees when due; or (d) the position is eliminated due to restructuring or economic conditions.
3.4. To invoke the guarantee, the Client must notify the Agency in writing within five (5) business days of the candidate’s departure.
4. NON-SOLICITATION AND CANDIDATE OWNERSHIP
4.1. The Client shall not directly or indirectly solicit, recruit, or hire any candidate introduced by the Agency for a period of [Non-Solicit Period Months] months from the date of the candidate’s initial introduction, without first paying the Agency’s full placement fee.
4.2. If the Client hires a candidate introduced by the Agency outside of the formal recruitment process, the Client shall pay [Direct Hire Fee] to the Agency.
4.3. A candidate is considered "introduced" by the Agency upon [Candidate Intro Method]. The introduction remains valid for [Candidate Validity Days] days from the date of submission.
4.4. The Client shall notify the Agency within three (3) business days if a candidate submitted by the Agency is already known to the Client or has been previously presented by another source. Failure to provide timely notice shall constitute acceptance of the Agency’s introduction.
5. OBLIGATIONS OF THE CLIENT
5.1. The Client shall provide the Agency with accurate and complete job descriptions, including required qualifications, compensation range, benefits, and reporting structure.
5.2. The Client shall review candidate submissions and provide timely feedback within five (5) business days of receipt.
5.3. The Client shall comply with all applicable employment standards legislation, including but not limited to the Employment Standards Act, 2000 (Ontario), the Employment Standards Act (British Columbia), the Employment Standards Code (Alberta), and the applicable labour standards legislation of the governing province.
5.4. The Client shall not discriminate against any candidate on the basis of a protected ground under the Canadian Human Rights Act (R.S.C., 1985, c. H-6) or the applicable provincial human rights legislation.
6. PRIVACY AND CONFIDENTIALITY
6.1. Both Parties shall comply with the Personal Information Protection and Electronic Documents Act (S.C. 2000, c. 5) ("PIPEDA") and any applicable provincial privacy legislation, including the Personal Information Protection Act (British Columbia), the Personal Information Protection Act (Alberta), and An Act Respecting the Protection of Personal Information in the Private Sector (Quebec), when collecting, using, or disclosing candidate personal information.
6.2. The Agency’s designated privacy officer is: [Privacy Officer].
6.3. Candidate resumes, personal information, and assessment results provided by the Agency are confidential and shall be used by the Client solely for the purpose of evaluating the candidate for the specified position. The Client shall not share candidate information with third parties without the Agency’s and candidate’s prior written consent.
6.4. Each Party shall keep confidential the terms of this Agreement, including fee structures, and shall not disclose such information to third parties without the other Party’s prior written consent.
7. EMPLOYMENT STANDARDS COMPLIANCE
7.1. Where the Agency operates as a temporary help agency, the Agency shall comply with all requirements of Part XVIII.1 of the Employment Standards Act, 2000 (Ontario), or the equivalent provisions of the applicable provincial legislation, including maintaining a valid licence where required.
7.2. Agency Licence Number: [Agency Licence Number].
7.3. The Agency shall not charge any fee to a candidate in connection with being assigned to perform work for the Client. This prohibition applies in all Canadian jurisdictions and is mandatory under Ontario ESA s. 74.8 and similar provincial provisions.
7.4. For temporary staffing assignments, the Agency is the employer of the assignment employee. The Agency is responsible for remitting source deductions (CPP, EI, and income tax) to the Canada Revenue Agency and providing T4 slips. The Client is not the employer of assignment employees for purposes of employment standards legislation, unless the applicable statute provides otherwise.
8. TERM AND TERMINATION
8.1. This Agreement shall commence on [Effective Date] and shall remain in force for a period of [Agreement Term Months] months (the "Initial Term").
8.2. Renewal: [Auto Renew].
8.3. Either Party may terminate this Agreement by providing [Termination Notice Days] days’ written notice to the other Party.
8.4. Upon termination, the Client shall remain obligated to pay all fees for candidates placed prior to the termination date and for any candidates hired within the non-solicitation period specified in Section 5. The guarantee period obligations shall survive termination.
9. LIMITATION OF LIABILITY
9.1. The Agency shall not be liable for any indirect, incidental, consequential, or special damages arising from or related to this Agreement, including but not limited to lost profits, business interruption, or loss of data.
9.2. The Agency’s total aggregate liability under this Agreement shall not exceed the total fees paid by the Client to the Agency in the twelve (12) months preceding the claim.
9.3. The Agency does not guarantee the suitability, competence, or performance of any candidate placed with the Client. The Client is responsible for verifying the candidate’s qualifications, credentials, and fitness for the position.
10. INDEMNIFICATION
10.1. Each Party shall indemnify and hold harmless the other Party from and against any and all claims, losses, damages, liabilities, and expenses (including reasonable legal fees) arising out of or resulting from any breach of this Agreement or any negligent or wrongful act or omission of the indemnifying Party.
10.2. The Client shall indemnify the Agency against any claims arising from the Client’s employment practices, workplace conditions, or treatment of placed candidates.
11. DISPUTE RESOLUTION
11.1. The Parties shall first attempt to resolve any dispute arising under this Agreement through good-faith negotiation. If the dispute cannot be resolved within thirty (30) days of written notice, either Party may submit the dispute to mediation administered by a mutually agreed mediator.
11.2. If mediation is unsuccessful, either Party may pursue any remedies available at law or in equity before the courts of competent jurisdiction in the Province of [Governing Province].
12. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of the Province of [Governing Province] and the applicable federal laws of Canada. The Parties irrevocably attorn to the exclusive jurisdiction of the courts of the Province of [Governing Province].
13. GENERAL PROVISIONS
13.1. Entire Agreement: This Agreement, including any schedules and amendments, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior negotiations, representations, warranties, commitments, and agreements.
13.2. Amendment: This Agreement may only be amended by a written instrument signed by both Parties.
13.3. Severability: If any provision of this Agreement is determined to be invalid or unenforceable, the remaining provisions shall continue in full force and effect.
13.4. Assignment: Neither Party may assign this Agreement without the prior written consent of the other Party.
13.5. Notices: All notices required or permitted under this Agreement shall be in writing and shall be delivered personally, by registered mail, or by email to the addresses specified herein.
IN WITNESS WHEREOF, the Parties have executed this Recruitment Agreement as of the date first written above.
AGENCY
Name: [Agency Contact]
On behalf of: [Agency Name]
CLIENT
Name: [Client Contact]
On behalf of: [Client Name]
Party 1
________________
Signature
Date: ________________
Party 2
________________
Signature
Date: ________________
What Is a Recruitment Agreement (Canada)?
A Recruitment Agreement in Canada sets the fees and terms on which a recruiter sources candidates for an employer, governed primarily by common-law contract principles.
Canadian recruitment agreements must comply with federal and provincial employment standards legislation. In Ontario, Part XVIII.1 of the Employment Standards Act, 2000 (S.O. 2000, c. 41) specifically regulates temporary help agencies and recruiters, including mandatory licensing requirements that took effect on July 1, 2024. Under these provisions, temporary help agencies must hold a valid licence issued by the Director of Employment Standards, and clients are prohibited from knowingly using the services of an unlicensed agency. Similar regulatory frameworks exist in British Columbia, Alberta, and Quebec.
A critical aspect of Canadian recruitment law is the prohibition against charging fees to job seekers. Ontario ESA s. 74.8 explicitly prohibits temporary help agencies and recruiters from charging any fee to a candidate in connection with finding or attempting to find employment. This prohibition is consistent across Canadian jurisdictions and reflects the principle that the cost of recruitment is borne by the employer, not the worker.
The agreement must also address privacy obligations under the Personal Information Protection and Electronic Documents Act (PIPEDA) and applicable provincial privacy legislation. Candidate personal information — resumes, employment history, references, and assessment results — constitutes personal information that must be collected with informed consent, used only for the stated recruitment purpose, and protected with appropriate security safeguards. Both the agency and the client are accountable for their handling of candidate data.
The legal framework governing the Recruitment Agreement (Canada) in Canada draws on several key statutes and regulatory bodies. Under the Canada Business Corporations Act (R.S.C. 1985, c. C-44), Corporations Canada maintains the federal registry. Section 12 of the CBCA governs corporate name requirements. The Competition Bureau enforces the Competition Act (R.S.C. 1985, c. C-34). Provincial securities commissions — including the Ontario Securities Commission (OSC) and British Columbia Securities Commission (BCSC) — regulate capital markets. The Federal Court of Canada has jurisdiction under the Federal Courts Act. Parties executing a Recruitment Agreement (Canada) in Canada should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Common law of contract sets the foundational requirements.
When Do You Need a Recruitment Agreement (Canada)?
A Recruitment Agreement is needed whenever a company engages a third-party agency to assist with hiring. The most common scenario is contingency recruitment, where the agency is paid a percentage of the hired candidate's first-year salary only upon successful placement. Companies use contingency recruiters when they need to fill positions quickly but want the flexibility to work with multiple agencies simultaneously and pay only for results.
Retained search engagements require a formal agreement because the client pays a non-refundable retainer upfront, typically one-third of the estimated total fee. Retained searches are used for senior executive positions, specialized technical roles, or confidential searches where discretion is paramount. The agreement must clearly define the retainer amount, payment schedule, and whether the retainer is credited against the final fee or charged in addition to it.
Temporary staffing arrangements are another common trigger. When a company needs workers on a short-term or project basis, the staffing agency acts as the employer of record, handling payroll, source deductions (CPP, EI, income tax), and T4 reporting obligations to the Canada Revenue Agency. The agreement must define the hourly bill rate, the markup structure, and the respective responsibilities of the agency and client regarding workplace safety, workers' compensation (WSIB in Ontario, WCB in other provinces), and employment standards compliance.
Contract-to-permanent arrangements require special attention because the candidate initially works as a temporary employee of the agency before being offered permanent employment by the client. The agreement must specify the conversion fee — the amount the client pays to hire the worker permanently — and the timeframe after which no conversion fee applies.
Without a written agreement, disputes over candidate ownership, fee entitlement, and guarantee obligations are common and difficult to resolve. Courts have consistently held that the terms of the recruitment relationship must be documented in writing to be enforceable.
Under the Canada Business Corporations Act (R.S.C. 1985, c. C-44), Corporations Canada maintains the federal registry. Section 12 of the CBCA governs corporate name requirements. The Competition Bureau enforces the Competition Act (R.S.C. 1985, c. C-34). Provincial securities commissions — including the Ontario Securities Commission (OSC) and British Columbia Securities Commission (BCSC) — regulate capital markets. The Federal Court of Canada has jurisdiction under the Federal Courts Act.
What to Include in Your Recruitment Agreement (Canada)
Scope of Services: Define whether the engagement is contingency, retained, temporary staffing, or contract-to-permanent. Specify whether the arrangement is exclusive or non-exclusive, and list the types of positions the agency will recruit for.
Fee Structure: Clearly state how fees are calculated. For percentage-based fees, specify the base (first-year gross annual salary including base, guaranteed bonuses, and signing bonuses). For flat fees, state the fixed amount per placement. For temporary staffing, define the hourly bill rate and any overtime or holiday premium rates. All fees are subject to GST/HST under the Excise Tax Act.
Guarantee Period: Define the replacement guarantee window (typically 60-90 days) and the remedy — free replacement candidate, pro-rated refund, or full refund. Specify the conditions that void the guarantee, such as the client terminating the candidate without cause or changing the job terms.
Candidate Ownership and Non-Solicitation: Establish that candidates formally introduced by the agency belong to the agency for a defined period (typically 6-12 months). Prohibit the client from hiring introduced candidates directly without paying the agency's fee. Define what constitutes a valid introduction.
Privacy and PIPEDA Compliance: Both parties must comply with PIPEDA when handling candidate personal information. The agency must designate a privacy officer, obtain candidate consent before sharing information with the client, and limit collection to what is necessary for the recruitment purpose.
Employment Standards Compliance: In Ontario, confirm the agency holds a valid licence under ESA Part XVIII.1. Confirm that the agency does not charge fees to candidates. For temporary staffing, clarify which party is the employer of record and which is responsible for source deductions, T4 reporting, and workplace safety.
Term and Termination: State the agreement's duration, renewal terms, and how either party can terminate with written notice. Specify that fee obligations and non-solicitation restrictions survive termination.
Additional compliance elements for a Recruitment Agreement (Canada) used in Canada include: Under the Canada Business Corporations Act (R.S.C. 1985, c. C-44), Corporations Canada maintains the federal registry. Section 12 of the CBCA governs corporate name requirements. The Competition Bureau enforces the Competition Act (R.S.C. 1985, c. C-34). Provincial securities commissions — including the Ontario Securities Commission (OSC) and British Columbia Securities Commission (BCSC) — regulate capital markets. The Federal Court of Canada has jurisdiction under the Federal Courts Act. Forms-legal.com provides this template as a starting point for Canada-compliant documentation.
Sources & Citations
Statutory citations link to official government sources.
- R.S.C. 1985, c. C-44CA official
- R.S.C. 1985, c. C-34CA official
Cite this page
Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Recruitment Agreement (Canada) (Canada) [Legal document template]. Forms Legal. https://forms-legal.com/canada/business/contracts/recruitment-agreement-canada
"Recruitment Agreement (Canada) (Canada)." Forms Legal, 2026, https://forms-legal.com/canada/business/contracts/recruitment-agreement-canada.
@misc{formslegal-recruitment-agreement-canada,
author = {{Forms Legal}},
title = {Recruitment Agreement (Canada) (Canada)},
year = {2026},
howpublished = {\url{https://forms-legal.com/canada/business/contracts/recruitment-agreement-canada}},
note = {Free legal document template. Based on Common law of contract}
}Also available for these jurisdictions:
Frequently Asked Questions
In Ontario, temporary help agencies and recruiters must hold a licence under Part XVIII.1 of the Employment Standards Act, 2000 (S.O. 2000, c. 41), which took effect on July 1, 2024. Under Section 74.2(1) of the Employment Standards Act, 2000, temporary help agencies must apply to the Director of Employment Standards for a licence before operating. Under Section 74.3.1, client companies are prohibited from knowingly using the services of an unlicensed temporary help agency after the licence requirement came into force. In British Columbia, employment agencies are regulated under the Employment Standards Act (RSBC 1996, c. 113) and the Employment Agency Licensing Regulation (B.C. Reg. 323/2008), which requires licences issued by the Registrar of Employment Agents. In Alberta, employment agencies must hold a licence under the Employment Agency Business Licensing Act (SA 2018, c. E-7.5). In Quebec, agencies must comply with the Act respecting labour standards (RLRQ, c. N-1.1) and related regulations but are not required to hold a dedicated agency licence as of 2024. Federal licensing for recruitment agencies is not required under any federal statute, but all agencies must comply with the Personal Information Protection and Electronic Documents Act (PIPEDA, S.C. 2000, c. 5) and applicable provincial privacy legislation when handling candidate personal information.
No. Under Section 74.8 of Ontario's Employment Standards Act, 2000 (S.O. 2000, c. 41), temporary help agencies and recruiters are expressly prohibited from charging any fee to a person in connection with finding or attempting to find employment for that person. This prohibition is absolute — it applies regardless of whether the candidate is ultimately hired. Violation of Section 74.8 is an offence under Section 132 of the Employment Standards Act, 2000, and may also result in revocation of the agency's licence under Section 74.13.2. In British Columbia, Section 10 of the Employment Standards Act (RSBC 1996, c. 113) similarly prohibits employment agencies from charging fees to job seekers. In Alberta, Section 5 of the Employment Agency Business Licensing Act (SA 2018, c. E-7.5) prohibits agencies from collecting fees from job applicants. In Quebec, Article 95 of the Act respecting labour standards (RLRQ, c. N-1.1) provides equivalent protections. The prohibition reflects a fundamental principle of Canadian employment law: the cost of recruitment is borne by the employer, not the worker. Recruitment agencies lawfully charge fees only to the client company — the employer — and never to candidates. Any agreement purporting to charge a job seeker is void and unenforceable in Canada.
Contingency recruitment fees in Canada typically range from 15% to 25% of the candidate's first-year annual salary, including base salary and any guaranteed bonuses or signing bonuses. The fee is payable only upon successful placement — that is, when the candidate commences employment with the client. Retained search fees typically range from 25% to 35% of first-year compensation and are paid in instalments: commonly one-third upon engagement, one-third at candidate shortlist presentation, and one-third upon placement. Retained searches are used for senior executive, board-level, or highly confidential searches where the agency dedicates exclusive resources to the mandate. Temporary staffing agencies charge a markup on the worker's hourly rate — typically 25% to 50% depending on the sector, skill level, and regional market. The markup covers the agency's employer payroll obligations including Canada Pension Plan (CPP) contributions under Section 8 of the Canada Pension Plan (R.S.C. 1985, c. C-8), Employment Insurance (EI) premiums under Section 67 of the Employment Insurance Act (S.C. 1996, c. 23), Workplace Safety and Insurance Board (WSIB) premiums in Ontario under Section 72 of the Workplace Safety and Insurance Act, 1997 (S.O. 1997, c. 16, Sched. A), and Workers' Compensation Board (WCB) premiums in other provinces. All recruitment fees are subject to GST/HST under the Excise Tax Act (R.S.C. 1985, c. E-15) and, in Quebec, to QST under the Act respecting the Quebec sales tax (RLRQ, c. T-0.1).
A guarantee period in a Canadian recruitment agreement is the window after a placed candidate's start date during which the agency will provide a free replacement candidate or a pro-rated refund of its fee if the candidate leaves voluntarily or is terminated for just cause. Guarantee periods typically range from 60 to 90 days for permanent placement engagements and are a standard feature of Canadian contingency and retained recruitment agreements. The guarantee is triggered when: (1) the candidate resigns voluntarily within the guarantee period; or (2) the client terminates the candidate for just cause under Section 63(1)(b) of Ontario's Employment Standards Act, 2000 (S.O. 2000, c. 41) or equivalent provincial provisions. The guarantee does not apply if the client terminates the candidate without cause — in such cases, the candidate is entitled to statutory termination pay under Section 54 of the Employment Standards Act, 2000 and common law reasonable notice, and the agency is not responsible for replacement. The guarantee also does not apply if the client changes the candidate's compensation, role, or reporting structure materially from what was agreed at placement. Clearly defining the conditions that trigger and void the guarantee is essential to avoid disputes. Canadian courts applying Ontario's Superior Court of Justice or British Columbia's Supreme Court have held that ambiguous guarantee provisions are construed against the party who drafted the agreement. Forms-legal.com provides this template to help Canadian businesses document guarantee terms clearly.
The Personal Information Protection and Electronic Documents Act (PIPEDA, S.C. 2000, c. 5) applies to all commercial recruitment activities in Canada and governs how agencies and client companies collect, use, and disclose candidate personal information. Under Section 5 of PIPEDA, organizations must comply with the ten fair information principles set out in Schedule 1, including accountability, identifying purposes, consent, limiting collection, limiting use, safeguards, openness, individual access, and challenging compliance. In a recruitment context, this means the agency must obtain a candidate's informed consent before sharing their resume, references, and assessment results with a client company. Under Section 4.3 of Schedule 1, consent must be meaningful — candidates must understand what information is being shared and for what purpose. Under Section 4.5, personal information must not be used for purposes beyond those for which consent was obtained. Both the recruitment agency and the client company bear accountability obligations under Section 4.1 of Schedule 1 — each must designate a privacy officer responsible for compliance. In Quebec, Law 25 (Act to modernize legislative provisions respecting the protection of personal information, CQLR c. P-39.1, as amended by S.Q. 2021, c. 25) imposes additional obligations beyond PIPEDA, including mandatory privacy impact assessments before transferring personal information outside Quebec, breach notification to the Commission d'accès à l'information du Québec (CAI), and the right to data portability. British Columbia and Alberta have substantially similar legislation — the Personal Information Protection Act (PIPA, SBC 2003, c. 63) and the Personal Information Protection Act (Alberta, SA 2003, c. P-6.5) respectively — that applies instead of PIPEDA for provincially regulated activities. The recruitment agreement must specify how long candidate data is retained and when it is destroyed.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
Found an error? Let us knowRelated Documents
You may also find these documents useful:
Employment Contract (Canada)
Hire employees in Canada with a legally compliant Employment Contract. Covers compensation, benefits, probation period, termination provisions, and provincial ESA requirements including CPP/EI deductions.
Non-Solicitation Agreement (Canada)
Protect your business relationships with a Canadian Non-Solicitation Agreement. Prevents former employees or partners from soliciting your clients or staff. Enforceable under Canadian common law.
Non-Compete Agreement (Canada)
Restrict competitive activities with a Canadian Non-Compete Agreement. Important: non-competes are banned in Ontario for most employees. This template includes provincial enforceability warnings and reasonableness requirements.
Service Agreement (Canada)
Create a comprehensive Canadian service agreement covering the terms between a service provider and client. Includes GST/HST tax provisions, PIPEDA data protection compliance, limitation of liability, and province-specific governing law. Suitable for consulting, IT, marketing, and professional services across all provinces.