Terms of business and AI confidentiality: what a recruitment agreement gives away in ChatGPT or Claude.

The terms of business is the contract between an agency and each client, and it holds the agency’s most guarded commercial terms: the fee percentage, the replacement guarantee, how long a candidate stays “introduced” to the client and what happens if the client later converts a contractor. Staff paste the agreement into ChatGPT or Claude to summarise it, compare it with another client’s or redraft a clause. This page marks every item in a routine agreement that confidentiality and the client relationship touch, and shows how the same agreement is worked on Ermos inside the agency.

The terms of business

Signed with a client before the first search, then reviewed when a dispute arises, a client asks to renegotiate or a lawyer redrafts the standard form. It is read most closely when a placement goes wrong.

An invented agreement. The parties and signatories are fictional; the ABN is the ATO’s published example value. Hover or tap any highlighted item for the analysis; the full list is below.

What leaves the agency

1. 1
   The parties and the ABN

   Who is contracting with whom. Identifies the client relationship, which the agency is usually obliged to keep confidential, and a business identifier.

2. 2
   The fee percentage and payment terms

   The price of the agency’s service. The most guarded number in the business: a competitor who sees it can undercut it, and another client who sees it can ask for it.

3. 3
   The replacement guarantee

   The agency’s commitment if a placement fails. A cost the agency takes on, and a term clients negotiate hard.

4. 4
   The introduction period

   How long the agency can claim a fee on a candidate it introduced. A restriction on the client’s hiring, and the clause most often argued over.

5. 5
   The conversion fee schedule

   What the client pays to take on a contractor permanently. Commercial information that shapes how contractors are placed.

6. 6
   The candidate information clause

   A generic duty to hold candidate information in confidence. The clause that governs what a client may do with the CVs it receives. The wording is standard and contains no personal information. Privacy Act guide.

7. 7
   The labour hire licensing clause

   The NSW Government says there is currently no labour hire licensing scheme in New South Wales, and that Queensland, Victoria, South Australia and the ACT have schemes. Whether a licence is needed depends on where the work is done and what the agency supplies, so the clause is general and a lawyer should draft it.

8. 8
   The liability limit

   The most the agency can be liable for on a placement. A term that decides who bears the loss when something goes wrong.

9. 9
   The signatories

   Two named directors who bound their companies. Personal information about them, and the people a dispute would be addressed to. Privacy Act guide.

What happens in Frontier Models (ChatGPT, Claude)

• The whole document is transmitted to the provider’s servers. On personal plans the user cannot choose where it is stored or processed, and for the major providers that has generally meant outside Australia, under that country’s legal process. Some business plans offer storage in Australia, but the provider still receives the content.
• On consumer tiers, prompts can be retained and used to train future models.
• The provider’s staff and systems can reach the content under the provider’s own policies.
• Once sent, the agency no longer controls it. Retention and deletion happen on the provider’s terms.

The same document on Ermos

Part of AI data leakage in recruitment agencies.

Common questions