Can you retract a job offer?

It has recently hit the headlines that Uber have retracted an offer of employment to Amazon’s previous Vice President, Assaf Ronen. This comes after it was discovered that Mr Ronen had in fact already left Amazon under unknown circumstances when he got offered the job at Uber, but had claimed he was still working for Amazon at the time.  This discrepancy allowed Uber to retract the offer without being liable for any breach themselves.

So how can you retract an offer of employment, and is it always straightforward? Unfortunately, no.

Conditional offers of employment

An offer of employment can be made conditional on certain promises being satisfied and/or proven. Common examples of this could include proof of someone’s academic results, receipt of two satisfactory references, or proof of someone’s right to work in the UK.

If the individual does not satisfy one of these conditions, you will then be able to withdraw the offer with no further consequences.

Unconditional offers of employment

If the offer of employment is unconditional (and has been accepted), then the above will obviously not apply, and a binding contract will have been created between yourselves and the individual, even if they have not yet joined. This complicates matters. Nevertheless, there are still some limited situations where you may have a legal basis to retract the offer, such as if the individual commits an act of gross misconduct that could justify summary dismissal without notice.

You could also consider serving the individual with their contractual notice period before their employment actually starts. As ending the agreement could constitute a breach of contract, you should compensate the individual with the notice pay that they would have received had they actually started working for you to head off such a claim.

What if you do not have a legal basis for retracting an offer?

If you retract an offer of employment without a legal basis to do so, and without providing any compensation, you are at risk of a breach of contract claim being brought against you in the Employment Tribunal (“ET”).

The risks of a claim being brought should be considered:

• it is now free for someone to bring a claim in the ET, and single claims have risen by 90% as a result;
• the compensation awarded will seek to put the individual in the position they would have been in, had the contract not been breached, which could be a substantial amount (especially if someone has already resigned, or is a senior employee); and
• individuals who have not yet started for you can still bring a claim for discrimination, so you should not withdraw an offer based on a protected characteristic such as age, race or disability etc.

Next steps

1. Ensure your offers of employment are conditional on anything you deem essential for the role.
2. Seek legal advice if you are unsure of the grounds of retracting an offer of employment.
3. Be aware of your obligations and the potential consequences if you breach the contract of employment.

If you would like to talk to a member of the team about anything in this document, please call 0161 926 9969 or email employment@mplaw.co.uk.

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