As part of our mini-series of articles on recruitment this month, in this article we explore some of the issues which can arise at the offer stage. This stage can be a sensitive one, affected by the unpredictability that life can throw at both employers and candidates. It can therefore be helpful to have a solid understanding of the rights and obligations of both parties in case things do unexpectedly change. We will explore the legalities of withdrawing offers and practicalities for employers.

Contract law

Generally, a binding contract is created when an offer is made, accepted and there is an intention by both parties to enter into a contract.

As soon as these elements are in place, the contract comes into existence. This means the parties are bound by its terms from that point in time. The employer, for example, is required to provide the individual with work from the agreed start date and to pay them for that work, or to terminate the contract by following the notice provisions. The employee is required to turn up for work from the agreed start date.

Withdrawing an offer: as an employer

It is usual for an employer to make the offer of employment conditional on the applicant satisfying certain conditions. This means that unless the applicant satisfies the conditions, accepting the offer won’t bring an employment contract into existence.

Such conditions typically include:

  • Satisfactory references
  • Passing “Right to Work” checks
  • Providing evidence of suitable qualifications for the role
  • Holding regulatory certifications or memberships

Where an applicant fails to satisfy one of the offer’s conditions, withdrawing an offer does not require an employer to abide by the notice provisions in the contract.

However, if the offer has not been made with conditions attached, i.e. an “unconditional offer”, any withdrawal by the employer must be in line with the contract’s notice provisions.

Offer Conditions: Unsatisfactory references

This is one of the most common conditions which candidates fail to satisfy. In response to an employer’s offer withdrawal for this reason, some candidates request details of the unfavourable reference, or even a copy of it. Although the UK General Data Protection Regulation, generally obliges employers to share copies of personal data with a candidate who requests it, the Data Protection Act 2018 contains an exemption for references given “in confidence” for the purposes of employment. Often, the wording of a reference will make this clear and, if not, this can be checked with the reference giver so that the reference is not disclosed to the candidate if the referee requires it to be withheld.

Many employers make clear in their recruitment procedures that references will be given and received in confidence, which can provide clarity for candidates. Withdrawing an offer from a candidate on the basis of an unsatisfactory reference can come as a considerable surprise on occasion and it is not unusual for a candidate to challenge an unexpectedly poor reference. Whilst referees have an obligation both to the candidate and the recipient of the reference to ensure that the details are honest and accurate, some candidates have an expectation that references should contain glowing testimonials, whether those are true or not. The volume of litigation in the past from disappointed new employers, who find that the promise made by the former employer of wonderful performance from a new member of staff does not materialise, has led to the widespread current practice of providing factual-only references, giving little more than job title and dates of service. Arguably, placing little reliance on an unknown previous employer for an indication of future performance and instead observing and managing the employee once onboard will give a better chance of spotting problems early on.

Offer conditions: Right to Work Checks

Please see our article on right to work checks, and the post-Brexit immigration landscape here

Withdrawal on satisfaction of all conditions

Sometimes circumstance require an employer to withdraw their offer in spite of an individual satisfying all of the conditions. Business requirements may have changed between the point of offer and the planned start date, especially if several months have elapsed. In such circumstances, employers are in theory required to satisfy the notice provisions in the contract, although in practice it is unusual for an employer to do so if the offer is withdrawn early on. On a practical note, and to support a positive impression of the organisation being left with the applicant in challenging circumstances, it is best practice for employers to provide a brief but clear reason for the withdrawal.

Withdrawing an acceptance: employee

If an individual changes their mind after accepting the offer and before the start of their employment, in theory they should also give notice. If they fail to do so, they would in theory be liable for losses sustained from the breach of contract, such as recruitment or agency staff costs. However, in most cases it would be impractical, if not futile, to attempt to recover such costs from an individual.

This article is part of our recruitment mini-series. (Vetting Candidates, Avoiding Discrimination & Right to Work Checks)

If you would like further advice tailored to your particular circumstances, please contact us.