Whatever the state of the labour market, there may be instances where an employer needs to withdraw a job offer. It might be that support or funding for a role has dissipated, or that trading conditions mean the existing team are expected to cover the role. In more difficult cases, an unsatisfactory reference might have been received, or some current employees may be agitating against the recruitment in view of the reputation of the new employee.
However, no one likes to be let down, and a prospective employee who has gone through the process of application, interview and assessment is likely to feel aggrieved if they are told they are no longer wanted for a role. That position is heightened when they have already given notice on their current role to move across.
Principal risk
The main risk is that the candidate may then be able to bring a claim for breach of contract – even if the employment is not due to start for weeks or even months. The critical thing will be whether there was a clear offer of employment that had been made, and that the offer had been accepted by the employee. Either of those interactions might have taken place verbally or in writing.
Conditions attaching to an offer
In the case of most offers, the employer will have made clear that the offer is subject to certain conditions being fulfilled. These are likely to relate to the candidate’s qualifications, satisfactory references, a DBS check and the right to work legally in the UK. It’s important that the way in which any ‘satisfactory’ standard is to be assessed is clearly set out. For instance, what does ‘subject to satisfactory references’ actually mean? Is a reference confirming dates of employment sufficient? Through whose eyes will the assessment be carried out and against what standard will it be measured? These points should be clearly outlined in the offer.
Withdrawing the offer
Once an offer has been accepted, it cannot be withdrawn without there being a breach of contract. However, if the offer hasn’t yet been accepted, withdrawal is possible. Time and explicit wording will both be critical, and it will also be necessary to prove that the employee received notification of the withdrawal.
Challenges employees will face
Most employees are likely to be disappointed and many will have given up existing employment to accept an offer with the new employer; a challenge is therefore likely. Businesses should be ready with a clear explanation of the reason for not proceeding with the employment/withdrawing the offer. In the case of a high-profile appointment, an employee is likely to want some form of ‘open letter’ confirming that the withdrawal of offer was not a result of any shortcoming or failing on the part of the employee.
Normally, the financial compensation to which the employee is entitled will be limited to the notice that would have applied during the probationary period. In many cases, this will only be a week or two. However, should the matter proceed to court or tribunal (the claim could be brought in either forum), the employer will need to be able to show clear evidence as to the relevant contractual period. In the absence of this, a ‘reasonable period’ will apply, which could easily be a month or, for more senior roles, as much as three months.
Failure to show good objective grounds for withdrawing the offer
As well as a potential claim for breach of contract, there will be an increased likelihood of a successful discrimination claim being brought. This could arise where it is the profile or reputation of the candidate that gives rise to the change of mind on the part of the employer. Businesses will be aware that a potentially meritorious claim of unlawful discrimination will take compensation levels to far more substantial levels.
Other considerations
The decision not to proceed with any particular hire will need to be explained clearly to the existing team, but discreetly if it relates to the candidate’s abilities, etc. Those involved in the interview and assessment process may feel the time they expended is not being valued. Those who were about to welcome the new recruit will need to be reassured that another candidate is to be sought as a matter of urgency (if that’s the case).
Externally, the increased use by prospective employees (and those who are disgruntled) of platforms such as Glassdoor, Quora or The Muse means employers will want to take account of how the rebuffed candidate feels they were treated in terms of an, albeit brief, employee experience.
For more information about any of the issues covered in this update, or if you are an employer needing advice in relation to withdrawing an employment offer then please get in touch with one of our employment law solicitors today.
This article was first published on People Management’s website.
