Withdrawing a job offer

Many employers assume a conditional job offer can be withdrawn without consequence before employment begins, but a recent Employment Appeals Tribunal ruling shows it may not be that simple. If an offer has been accepted, withdrawing it for business reasons unrelated to the conditions could lead to breach of contract and notice pay.

In ancient scripture it was said that “the Lord giveth, and the Lord taketh away”. But he never got hauled before an employment tribunal for doing so.

A recent case from the employment appeals tribunal (EAT) has found that once you “giveth” a conditional job offer, you are at risk if you “taketh” it away for an unrelated business reason.

What were the technicalities?

Broadly speaking, you can give either conditional or unconditional job offers.

An unconditional job offer becomes legally binding as soon as it is accepted. You would likely have to pay a notice period if you terminate the employment, even if it is before they had started.

More commonly, conditional job offers are made. As you can imagine, the conditions would often be:

• Subject to satisfactory references
• Subject to background and right to work checks
• Subject to the passing of a probationary period

Traditional thinking was that until these conditions have been met, a contract is not formed. However, this EAT judgement turns this on its head.

Of particular note was that: of course the presence of a contract could NOT be denied prior to a probation period being completed.

And logically if the contract is in force from day one of employment, then it is in fact formed upon unconditional acceptance by the candidate of the conditional offer.

In this case, the references and right to work checks had not even been started by the time the offer was withdrawn. So they were not failed by the candidate, or should we say the employee.

Moreover, a notice period had not been provided as part of the job offer, so the EAT applied one of three months, based on what it considered reasonable in this case.

So what does this mean for your recruitment?

While few employers will hand out job offers only to withdraw them for unrelated business reasons willy nilly, it is important to be aware of this ruling so you can make more informed recruitment decisions.

We think the practical steps you should take right now are:

• To understand that there is risk around withdrawing job offers after they have been accepted but before employment starts.
• Review your existing conditional job offer wording to check what you are actually saying to candidates.
• Be clear about notice periods at the job offer stage, not waiting until day one of employment.
• Clearly stating whether conditions are intended to delay the formation of a contract or allowing for termination after one has commenced.

Help from The HR Dept

This spotlight shows how complex apparently simple aspects of employment can be, and why for SMEs it pays to have some HR expertise on your side.

We can help in this matter either as a one-off review and tidy up of your recruitment processes, or using our retained Advice Line services where we provide correct documentation and email/telephone advice when asked as a matter of course.

Better still, when you sign up to Advice Line, you get tribunal indemnity insurance, offering you legal protection so long as you have followed our advice from the start of any issue.

Contact us on 0117 970 2955 or visit our website www.hrdept.co.uk