Guide
Temp to perm transfer fees: what regulation 10 actually says
Updated
This is the part of agency terms employers most often accept without reading, and the part where the Conduct Regulations most clearly give the hirer something.
The alternative you are entitled to be offered
Regulation 10(1) of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 provides that a term of a contract between an employment business and a hirer which is contingent on a work-seeker taking up employment with the hirer, or working for the hirer through another employment business, is unenforceable by the employment business unless the contract provides that, instead of a transfer fee, the hirer may by notice elect for a hire period of a length specified in the contract during which the worker will continue to be supplied (legislation.gov.uk).
In practical terms: a supplier who wants to be able to charge you a transfer fee must also give you the option of keeping the worker on assignment for a further specified period instead. Regulation 10(3) adds that the term is unenforceable where the employment business does not supply the worker for the duration of that hire period in accordance with the contract, unless it is in no way at fault. If your terms of business contain a transfer fee but no extended hire election, that is worth raising before you pay one.
The period after which a transfer fee cannot be charged
Regulation 10(4) provides that a term contingent on the worker taking up employment with the hirer, taking up employment with a person the hirer introduced them to, or working for the hirer through another employment business, is unenforceable where that begins after the end of the relevant period. Regulation 10(5) defines the relevant period as whichever ends later of: the period of 8 weeks beginning on the day after the day the worker last worked for the hirer through that employment business, or the period of 14 weeks beginning on the first day the worker worked for that hirer through that employment business.
What this means when you want to keep someone
- Read the transfer fee clause before the assignment starts, not when you have decided to hire.
- Check that an extended hire election is offered and note the specified length, because that is your alternative to paying.
- Work out where you are against the relevant period in regulation 10(5), on the facts of when the worker started and last worked.
- Compare the transfer fee against the cost of the extended hire period at the current charge rate. Sometimes the fee is cheaper, sometimes it is not, and the choice is yours to make.
- Raise it commercially and early. Agencies would generally rather keep a client than argue about one worker.
The wider point about terms of business
Employment agencies and employment businesses operate within the Employment Agencies Act 1973 (legislation.gov.uk) and the detailed conduct rules in the 2003 Regulations, and gov.uk summarises the practical effect for agencies and hirers (gov.uk). Those rules govern conduct rather than price. What an agency charges you is a commercial matter, but whether a particular clause is enforceable at all is sometimes not, and regulation 10 is the clearest example an employer will meet.
This is a general description of regulation 10 as shown on legislation.gov.uk on 14 August 2026, not legal advice. Whether a particular clause is enforceable on your facts is a question for a solicitor advising on your terms of business.