Hysome Cases | Service contract dispute between Beijing Yingtong Kole Management Consulting Co., Ltd. and an education consulting company in Beijing

The client, Beijing Yingtong Bole Management Consulting Co., Ltd. and an education consulting company in Beijing, signed a “Yingtong Headhunting Service Agreement”, agreeing that Yingtong Company can find and successfully recommend a CEO for the consulting company and can receive a recruitment service fee equal to 20% of the candidate's annual salary, and agreed that the following situation shall refer to a successful recommendation: 1. The consulting company issues a written employment notice (offer letter) to the candidate recommended by Yingtong Company; 2. The consulting company signs an employment contract with the candidate recommended by Yingtong Company; 3. The candidate recommended by Yingtong Company officially go through the employee entry procedure and work at the consulting company. In addition, the parties also agreed that the recruitment service fee shall be paid 3-8 working days after the completion of the service and in case of failing to pay the recruitment service fee on time, the late payment fee will be charged. After the service agreement was signed, Yingtong Company recommended the candidate Liang to the consulting company, and Liang also received an employment notice from the consulting company. However, the consulting company refused to pay recruitment service fees to Yingtong Company on the grounds that the the candidate were not employed by the company, so they did not sign a labor contract, and did not determine the salary and treatment.

The focus of the dispute in this case is whether Yingtong Company has completed the service content and service matters in the headhunting service.

After trial, the Beijing No. 3 Intermediate People's Court found that the consulting company had indeed issued a written employment notice to Liang, recommended by Yingtong Company, which had met the conditions for payment of recruitment service fees stipulated in the agreement. It ruled that the education consulting company in Beijing shall pay our client the recruitment service fees of  more than RMB 250,000 yuan, and the late fee of RMB 5,020 yuan.

The case came to an end after two trials. The court of first instance found that Yingtong Company's claim that the consulting company shall pay the recruitment service fee was lawful and proper, but determined that the amount of the recruitment service fee was RMB 150,000 yuan. Both the consulting company and Yingtong Company filed an appeal. The court of second instance annulled the first instance judgment and supported all claims proposed by Yingtong Company in accordance with the service fee payment standards agreed upon in the Yingtong Headhunting Service Agreement entered by and between the parties.