Can you retract a job offer?

Can you retract a job offer?

Gareth Matthews, Head of Employment, considers the thorny question of retracting a job offer, highlighting the potential risks and how best to address them.

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 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). Furthermore, it should be remembered that individuals who have not yet begun working 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.

What is the best approach?

Taking the above into account, it can be therefore be useful to consider the following when making a job offer:

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 advice from the Employment team at MLP Law in respect of any of the issues raised here or more generally, please do not hesitate to get in touch on 0161 926 9969 or employment@mlplaw.co.uk, or follow us on Twitter @HRHeroUK.