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An Auckland recruitment agency is charging job seekers one month's gross income to help them find a job.

Job hunters with Quest Recruitment must sign a contract to say they will work free for a month, with wages or salary going directly to Quest.

Alternatively, one-third of their gross income can be deducted for three months.

Businesses looking for staff normally pay recruitment agencies a fee, rather than the job candidates, but North Shore-based Quest says a "radical approach" is needed in the recession.

While charging the fee is legal, critics within the industry say it is unethical and exploitative.

Labour Minister Kate Wilkinson said the fee seemed "harsh".

"One month's pay is a significant amount of money for anyone, particularly people who have been jobless for a lengthy period and are desperate.

"New Zealanders shouldn't have to effectively buy their jobs."

The Weekend Herald has obtained a copy of the Quest Recruitment form that candidates sign to authorise the fee payment if a job is found.

It contains a confidentiality clause that states the "nature" of the relationship between Quest and the job hunter is to be kept secret.

The contract says Quest will not charge employers for its services and gives the candidate the "option" to pay the fee when placed with a company.

It goes on to state that Quest is unable to provide services free.

"In these uncertain times securing a job can be a very challenging proposition. In response to this, Quest Recruitment Ltd has introduced a radical new approach," the contract states.

North Shore woman Monique Dotchin met Quest staff on Friday last week to apply for a job.

A former recruiting consultant herself, the 37-year-old said her "jaw hit the floor" when she was told of the month's salary fee - at the end of the hour-long interview. "I was extremely angry. A professional would have told me [about the fee] on the phone or it would be on the website."

Quest Recruitment founder Heidi Loxton defended the practice.

She said the fee was not charged "across the board" for all candidates and paying it was "purely the choice" of the individual job seeker.

Asked whether Quest found jobs for candidates who did not sign the contract, Ms Loxton replied: "Absolutely."

Quest is not a member of the Recruitment and Consulting Services Association, which represents more than 80 per cent of the industry, including giants Drake and Madison.

Association head Andrew McComish, of ThinkHR in Christchurch, said charging job candidates a fee was not illegal but he considered it "unethical" and "immoral".

He said businesses paid recruitment agencies in two ways, either a negotiated flat fee or a percentage of the remuneration of the successful job candidate.

The average flat fee would be $6000 to $8000, while the percentage fee was normally between 12.5 and 17.5 per cent of the salary.

The International Labour Organisation, a United Nations agency, bans private employment agencies charging "directly or indirectly, in whole or in part, any fees or costs to workers". New Zealand is not a signatory to the ILO convention forbidding this.