Withdrawing an Offer of Employment Guide for Businesses
You just finished interviewing and you’re convinced you’ve found the perfect candidate. However, after you post the offer, new information comes to light that changes your mind, or circumstances change, leaving employers facing a critical dilemma: “Can a job offer be withdrawn after the contract is signed?”
In this specialist guide, our team of expert UK employment law consultants explore the complexities and considerations surrounding the removal of job offers, shedding light on the circumstances in which this can happen and the potential legal implications.
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UK laws on withdrawing a job offer
Whether you can withdraw a job offer will ultimately depend on whether you have made the applicant a conditional or unconditional job offer.
As an employer, you can withdraw an offer of employment at any time until it’s accepted. However, once the applicant has accepted an unconditional job offer, there is a legally-binding contract of employment between you and the applicant.
As such, if you later have a change of heart and decide not to hire the individual, they may take legal action against you for breach of employment contract. The jilted employee may claim that they have suffered loss, especially if they resigned from their previous role in order to take up your job offer.
They may be entitled to damages or compensation in line with their notice period. This is the time for which they would have been employed before you would have been permitted to dismiss them. This can be extremely expensive, especially in the case of employees in senior or managerial roles who have long notice periods.
In addition, applicants are protected from being discriminated against during the recruitment stage. This means if you withdraw the job offer for a discriminatory reason, there would be other losses the applicant could claim, too.
How to withdraw conditional job offers
A conditional job offer, on the other hand, can legally be withdrawn if (and only if) the applicant doesn’t fulfil all the conditions of the offer. The conditions of an offer could include satisfactory references, a criminal record check, a qualifications check, or a health check.
However, if the applicant does meet all of the conditions and you decide to withdraw the offer anyway, they may take legal action against you for breach of contract.
Again, you must not withdraw a job offer on the basis of a discriminatory reason. If you have made a conditional offer and found their health condition constitutes a disability, you must be very careful when deciding to withdraw a job offer. If you go ahead as the medical check shows the applicant has a disability, this likely to constitute direct discrimination and may result in an employment tribunal claim.
Think before you act…
In these situations, prevention is always better than cure. The best way to avoid having to take back a job offer is to thoroughly consider the applicant’s suitability for the role. Ask yourself not only whether they have the relevant qualifications, skills, and personal characteristics needed, but also whether they’ll be a good culture fit for your team.
Of course, you should also think about where you’re at as a business, and whether now is the optimum time to recruit. If other business conditions change, will you still be in a position to go ahead? Have you overlooked somebody internally who may be a better candidate for the role? Asking these questions now will help to prevent U-turns and difficult situations down the line.
Can a company withdraw a job offer if a reference is refused?
Yes. Provided the offer of employment is conditional on the individual being able to provide satisfactory references, you’re within you rights to remove the offer if the references indicate they were a consistently poor performer in their previous role (or may not be able to do the job).
Additionally, as a contract of employment only comes into force when an offer of employment is made and accepted, employers may also withdraw an unconditional job offer due to references if (and only if) the candidate hasn’t accepted yet. However, be mindful that if the withdrawal crosses with an acceptance of the offer, there may be a binding agreement in place; the withdrawal is only effective once it is received, whereas an acceptance of an offer is effective when it is sent.
Even if there’s a binding contract, it’s still possible to terminate it if you receive a bad reference, although it’ll be necessary to comply with any notice and salary requirements in place. Note that if there are no notice or salary requirements in place, then a court or tribunal may assess what’s reasonable in the circumstances if there has been a breach of contract. It’s best to look for expert advice if you’re looking to terminate an agreement.
As always, if you’re going to remove an offer (or terminate an agreement) because of an unsatisfactory reference, you should ensure you don’t act on discriminatory or protected grounds (under the Equality Act 2010).
What to include in a job offer withdrawal letter
You should briefly set out the reasons why the offer of employment is being removed. In addition, you should separately document your reasons for withdrawing the offer and retain documentary evidence that supports the reasons for doing so (this is in case the individual argues that the withdrawal was in fact unlawful).
If you’re withdrawing an accepted unconditional offer, whether you wish to include anything within the job offer withdrawal letter about any notice the individual would be entitled to is up to you. Though if there are notice requirements contained in the offer and acceptance documentation, these should be complied with in order for any notice to be effective.
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Facing an employment dilemma? Need expert outsourced recruitment services? From withdrawing a job offer to common issues such as misconduct and sickness absence, our employment law specialists can offer step-by-step guidance based on your specific situation. Trusted by 40,000 employers across the UK, we can help you to weigh up your options, avoid legal pitfalls, and achieve your preferred outcome with minimal disruption.
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