Withdrawing a job offer due to a downturn in work caused by COVID-19

17 Apr 2020

A common question that we are seeing from some of our clients responsible for HR is

"
we have made a job offer, with the individual due to start next month and due to the downturn in work caused by COVID-19, we don’t need this person now. Can we withdraw the offer?"
 
The answer depends on a number of factors.  

The first point here is whether or not the individual has accepted your offer. A contract is only binding after both offer and acceptance of the offer, so it can be withdrawn at any time before it is accepted.
 
If the offer has been accepted, a binding contract is in place. This means that the contract would have to be terminated by giving the amount of notice specified in the contract. If that notice period expires before their actual start date, for example there is a one week notice period and their start date is two weeks away, there will be no notice pay due as the contract will end before they were due to start earning. However if the notice period runs past the start date, you may have to pay some notice pay to avoid a claim.
 
One area that can cause confusion is where the contract states that there is a shorter notice period during a probationary period. Depending on how the contract has been worded, the individual might be able to argue that termination did not take place “during” probation and therefore claim a longer notice period. This issue can be avoided with careful wording in the contract.
 
In all cases, you still need to be careful about allegations of discrimination and therefore should keep a record of the business reasons for withdrawing the claim. You should always take care when making job offers in the first place; unexpected changes are one thing, but if a downturn was expected when you made the offer, causing the individual to give up gainful employment elsewhere, that could potentially lead to issues.
 
The individual will inevitably be left disappointed and facing financial hardship if they have resigned from another employment in order to take up your offer. The government job retention scheme may offer them a solution, with it being possible for their former employer to take them back and then place them on furlough, although that is not mandatory and will be a matter for that other employer to consider.
 
If you have similar issues in your business and would like further advice, please contact Will Walsh by email at Will.Walsh@dmhstallard.com or by phone on 01293 558540.
 

Further reading

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