Withdrawing an offer of employment is a decision not to be taken lightly. Before you take action, ensure you understand the legal risks of rescinding a job offer.
In most cases, it is unlikely that an employer would want, or need, to withdraw a job offer once it has been accepted. However, even where an employer is initially convinced they have found the perfect person for the job, there may be occasions where information comes to light post-interview that casts doubt on an applicant’s suitability.
This could be because the applicant has received an unfavourable reference, failed to pass a criminal record check or been unable to provide proof of their qualifications. It could also be for reasons wholly unrelated to the calibre of the applicant, such as where last-minute budget cuts mean the role is no longer economically viable, or simply due to a change of heart.
In some circumstances, it may be possible for employers to lawfully withdraw offers of employment, although this will primarily depend on whether the job offer was conditional or unconditional.
When can a job offer be withdrawn by an employer?
Job offers are typically separated into the following two categories: conditional offers and unconditional offers. The law will treat each type of offer differently, where an employer can only take action in certain situations once an applicant has already accepted the offer.
Withdrawing a conditional job offer
Job offers are normally conditional upon the applicant first satisfying certain requirements. In respect of conditional offers of employment, where the reason for withdrawing the offer is that the applicant has failed to fulfil all the conditions of the offer, the employer can withdraw their offer without any consequences.
The types of conditions that are typically attached to a job offer include receipt of satisfactory references, criminal record or medical checks, proof of academic qualifications, or proof of the right to work in the UK. This means, for example, if an applicant fails a DBS check for a job working with children, the offer will not crystallise. The employer can lawfully withdraw that offer because it remains incomplete unless and until all conditions are satisfied.
However, the position is changed where the applicant goes on to meet all the conditions required of them after the conditional offer has been made and accepted. In these circumstances the applicant would be entitled to take legal action against the employer for breach of contract. This will be so, even if the offer was made verbally. Provided the essential ingredients of offer and acceptance exist, a contract does not need to be in writing.
Further, if an employer withdraws a job offer for a discriminatory reason, for example, where they have discovered that the applicant is pregnant, they may also be liable for unlawful discrimination. There is no qualifying service period for an individual to claim pregnancy discrimination, or discrimination based upon any one of the protected characters under the Equality Act 2010, such as age, disability, religion or sexual orientation. The employee is protected from all forms of discrimination throughout the recruitment process.
Withdrawing an unconditional job offer
Unconditional job offers are offers made without any conditions attached. If an unconditional job offer has not yet been accepted by the applicant, the offer can be withdrawn by the employer without consequence. In contrast, once an unconditional offer has been made and accepted, and subject to the applicant being able to prove the contractual elements of offer and acceptance, there will be a legally binding contract of employment.
This will still be the case even where the precise terms of the employment contract have yet to be agreed in writing. This is because it is possible for certain terms to be implied into the contract by the courts or tribunal.
Employer liabilities when withdrawing a job offer
The law relating to withdrawing job offers is frequently misunderstood, where many employers mistakenly assume that there is nothing wrong in taking back a job offer at any time prior to the proposed employee starting work. However, an employment contract will rarely begin on the employee’s first day. Instead, it will usually be binding upon acceptance of any unconditional offer, or once any conditions attached to the offer have been satisfied.
It is also a common misconception that the potential ramifications for an employer who rescinds an accepted job offer are negligible. The financial liabilities for breach of contract in this context can be an extremely costly exercise, where a successful claimant may be entitled to recover damages for any losses suffered in consequence of their acceptance of the job offer.
The idea of any breach of contract claim is to put the innocent party back in the position they would have been in but for the breach. This means that if an applicant has resigned from their previous employment in order to take up the job offer, they may be entitled to damages, typically in line with any contractual notice period under their new, but unfulfilled, contract of employment. The net effect of withdrawing an accepted offer is to terminate the employment contract without notice.
In theory, this may not sound too onerous, especially where any probationary period would allow for a shorter notice period. However, rescinding a job offer can often prove to be an expensive decision for an employer to make, especially if the job entails a senior or managerial position with provision for a long contractual notice period. Further, if the reason for reneging on the job offer is found to be discriminatory, significant additional losses can flow from this.
Withdrawing a verbal job offer
The case of McCann v Snozone Limited (2015) ET/3402068/2015 provides useful guidance on the approach generally taken in the UK where employers decide to withdraw offers.
In this case Mr McCann attended two interviews, followed by a call from the recruitment agency making him a verbal offer to fill a maintenance engineer vacancy, which he accepted. Snozone later denied that a formal offer had been made and Mr McCann brought a claim for breach of contract before the employment tribunal.
It was held by the tribunal that Snozone, acting through the recruitment agency, had verbally offered Mr McCann a job, which had been accepted by him. Accordingly, this created a contract of employment which could only be terminated by giving notice in accordance with that contract. Finding in favour of Mr McCann, the tribunal confirmed that verbal job offers are capable of being legally binding, and withdrawal of such an offer may constitute a breach of contract. It also held that where no contractual notice period has been agreed, it is a question of what is reasonable.
On its facts, even though no salary or notice period had been agreed between the parties in this case, the tribunal found that Mr McCann was entitled to a reasonable contractual notice period of one month. Based on an anticipated annual salary of £32,500, the claimant was awarded £2,708 in damages, plus his tribunal fees.
Can an individual claim against the employer?
As an employer, if you withdraw a job offer post-acceptance, and in circumstances where the applicant satisfactorily meets any conditions attached to that offer, they will be entitled to sue your organisation for breach of contract. If they are successful in recovering damages, this can have significant financial repercussions for your business. It could also impact your employer brand, especially if the reason for rescinding the job offer is found to be discriminatory.
It is therefore essential that you ensure are making the right decision before offering an applicant a job role. You must feel confident that they are suitable for the role in question, with the relevant qualifications, skills and personal characteristics. They must also be the right fit for your organisation, where you are satisfied that they will integrate well with other members of staff or the team in which they will be working.
There is often a temptation to make a verbal offer on the spot, so as not to lose an impressive candidate. Still, even where you are satisfied that you have found the right person, any offer of employment should always be conditional, subject to all relevant checks and satisfactory references. The advantage of making a job offer conditional is that you can withdraw the offer without being in breach of any contract if the conditions are not met. This is because a contract of employment will not exist unless and until all conditions are satisfied.
By following strict procedures before making a legally binding job offer, employers can avoid the potential costs and liabilities of a poorly managed recruitment process. This will involve a number of considerations including who should make the job offer, the timing of the offer, how the offer should be made and what conditions should be attached.
In some cases, especially in respect of proposed high-earners with long contractual notice periods or where potential discriminatory issues may arise, it may also be beneficial to first seek expert legal advice before making or withdrawing a job offer. In this way you can minimise any exposure to a costly breach of contract or unlawful discrimination claim, and keep your employer brand intact.
Withdrawing a job offer FAQs
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Legal disclaimer
The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing & Content Agency for the Professional Services Sector.
