Can you withdraw the job offer?
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light that changes your mind, or circumstances change, leaving employers facing a critical dilemma: ‘Can a job offer be withdrawn after the contract is signed?’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 blog, we’ll explore the complexities and considerations surrounding the withdrawal of job offers, shedding light on the circumstances in which this can happen and the potential legal implications.
Whether you can withdraw a job offer will ultimately depend on whether you have made the applicant a conditional or unconditional job offer.
Withdrawing unconditional job offers
An employer can withdraw an offer of employment at any time until it is accepted. However, once the applicant has accepted an unconditional job offer, there is a legally-binding Contract of Employment between the employer 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 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. Therefore, if you withdraw the job offer for a discriminatory reason, there would be other losses the applicant could claim, too.
Withdrawing 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A conditional job offer, on the other hand, can legally be withdrawn if (and only if) the applicant doesn’t fulfil all the conditions of the offer.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, employers must not withdraw a job offer on the basis of a discriminatory reason. If you have made a conditional offer and found that their health condition constitutes a disability, you must be very careful when deciding to withdraw a job offer. Withdrawing a job offer simply because the medical check shows that the applicant has a disability is likely to constitute direct discrimination.
Think before you act…
In these situations, prevention is always better than cure. The best way to avoid having to withdraw a job offer is to always thoroughly consider the applicant’s suitability for the role first. Ask yourself not only whether they have the relevant qualifications, skills and personal characteristics needed for the role, but also whether they will be a good 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 I withdraw an offer of employment due to references?
Yes. As mentioned above, provided the offer of employment is conditional on the individual being able to provide satisfactory references, employers are within their rights to withdraw the offer if the references indicate that they were a consistently poor performer in their previous role or may not be able to do the job.
Additionally, because 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 is a binding contract, it is still possible to terminate it if you receive a bad reference, although it will 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 is reasonable in the circumstances if there has been a breach of contract. It’s therefore best to take advice if you are looking to terminate an agreement.
As always, if you are going to withdraw an offer (or terminate an agreement) because of an unsatisfactory reference, you should ensure that you don’t act on discriminatory or protected grounds.
What to include in a 'withdrawing a job offer' letter
In the job offer withdrawal letter, employers should briefly set out the reasons why the offer of employment has been withdrawn.
In addition, employers should separately document their reasons for withdrawing the offer and retain documentary evidence that supports the reasons for doing so, in case the individual argues that the withdrawal was in fact unlawful, e.g. discriminatory.
If you are 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.
If you are withdrawing an offer of employment because someone has not met the requirements of a conditional offer, for example due to unsatisfactory references or a failure to return signed documentation, download our sample withdrawing the job offer letters below.
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Can I withdraw a job offer due to coronavirus?
If COVID-19 has impacted your business and caused you to rethink your hiring decisions, the legal position is the same as in normal circumstances in that you can withdraw an offer at any time prior to it being accepted.
If the offer was conditional, i.e. upon receiving satisfactory references or something else, then you can withdraw the offer at any stage prior to those conditions being fulfilled and there will be no cost to you. However, if the offer has been accepted (even verbally) and was either unconditional or the conditions have been fulfilled, you can’t withdraw the offer.
You can, however, terminate the contract (so that the potential employee never actually starts work with you) by serving whatever notice is required under the terms of the contract. For example, if there is a one-month notice period which takes effect immediately, you can pay one month’s payment in lieu of notice to terminate the contract.
Get specialist support
Facing an employment dilemma? Need advice on the legal position and what to do next? 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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