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Is It Ever Too Late to Withdraw a Job Offer?
Did you know that if you withdraw an offer of employment after having received an acceptance of the offer, it will constitute a breach of contract, even though the prospective employee has not yet started work?
If an unconditional offer of employment has been made and clearly accepted (verbally or in writing) by a prospective employee, then a binding contract exists between the employer and the prospective employee, even if s/he has not yet started working.
What are the consequences of withdrawing?
If you do not proceed with the hire (for whatever reason), then you will be in breach of contract and the prospective employee may be entitled to damages for that breach as there will be a period notice due – like any other termination. The value of such claim would typically be the net salary and cash value of any benefits that the prospective employee would have received during his/her notice period which could be quite costly if s/he is a senior hire who has a long notice period. In the absence of any written term which provides for notice, the Tribunal will ultimately determine themselves as to what length of notice is reasonable taking into account the seniority/role of the individual.
In the recent case of McCann v Snozone Ltd, an Employment Tribunal awarded the claimant; Mr. McCann damages in the sum of £2,708 (as well as tribunal fees of £390) for breach of contract where he verbally accepted a job offer made by a recruitment agency acting for the employer, and the employer subsequently unilaterally withdrew the offer. In this particular case, the terms of the employment were not entirely certain and in the absence of agreed terms, the tribunal determined that a minimum reasonable contractual notice period was one month.
What happens if I need to withdraw the offer but it has already been accepted?
If there is a binding contract in place and the prospective employee has accepted the job offer this does not necessarily mean that you cannot withdraw the offer. In this situation, it simply means that you need to tread carefully and adopt a different course of action to ensure that you do not face a breach of contract claim and/or a complaint for discrimination.
As the prospective employee would be entitled to sue for damages as a result of the breach of contract between the two parties, you will need to look at compensating the prospective employee with an amount that corresponds to the notice period and/or the cash value of any benefit entitlements they would be entitled to receive had they commenced work.
It is further worth noting and having at the forefront of your mind (as with any termination) there is nothing to stop a prospective employee from advancing a claim for discrimination (where there is no specific length of service required to bring such a claim) if the reason to withdraw the job offer is because of, or in any way connected to, a protected characteristic. For example, you should certainly air on the side of caution if an offer is withdrawn following a medical assessment or if the applicant informs you that she is pregnant. It is therefore highly recommended and good practice, to ensure that you have a paper trial and fully document the reasons for the withdrawal to counter any potential allegation of discrimination occurring.
Useful tip to consider
It is worthwhile considering to make any job offer subject to a number of conditions such as receiving a satisfactory reference and proof of qualifications. This means that an obligation to employ a prospective employee will not exist until all those conditions are satisfied. By making an offer in this way, and in circumstances where the conditions are not met, you can lawfully withdraw the offer.
*All information is correct at the time of publishing