24th October 2016


 Issue No.  2016/22




Withdrawal of job offer was a breach of contract
Having found what is believed to be the right candidate for a job vacancy, there is a temptation to make a verbal offer on the spot or shortly afterwards, without setting out all the terms. A recent case before the employment tribunal highlights the consequences of making hasty verbal offers of employment as part of the recruitment process. 

A contract is formed as soon as an offer has been accepted. There are some proviso’s such as the contract containing ‘consideration’ or something of value being gained by each party (e.g. employee turns up to work and we will pay the employee salary) and there is an intention to create legal relations. Once the offer has been accepted, then the legal relationship created can only be terminated by giving notice in accordance with the contract. If no contractual notice is agreed, then it is a question of what is reasonable.

Agency fills maintenance engineers’ jobs
In this case an employment agency was engaged by a company to find suitable candidates to fill two maintenance engineer vacancies. A candidate was interviewed twice by the company, and the tribunal found that the candidate received two subsequent phone calls from the agency.  During the first phone call, the candidate was advised that the company wished to offer him the job, but that it would be in the middle of the advertised salary band of £28,000 to £30,000. The candidate accepted that offer as put to him. The second phone call confirmed that the Company were pleased that the candidate had accepted their offer.

The agency confirmed to the candidate that a written contract would be with him by the end of the week, but when no documents arrived, the candidate contacted the agency. In the meantime, the agency had become aware that the Company had decided not to employ the candidate. Consequently, the agency told the candidate he was not being made an offer of employment. The candidate contacted the Company, and they said that no verbal or written offer of employment had been made.

The two initial phone calls by the agency were at the crux of the claim, and the tribunal were satisfied that the candidate was offered a job, which was accepted. Consequently, a contract, albeit verbal, had been made. As it had not been honoured, there had been a breach of contract.  In the absence of an express term of the contract relating to notice periods to terminate the contract, the tribunal determined that a reasonable period of notice would have been one month. The candidate was awarded a month’s pay plus his tribunal fee.

The case serves as a reminder of basic contract law. A contract can be made verbally or in writing on the basis of an offer, consideration, acceptance and an intention for it to be legally binding. Once the contract is made, then it can only be terminated in accordance with its terms. 

Could the employer have done anything differently?
One option is that the employer could have issued a contract (or Statement of Main Terms and Conditions) that included a notice provision.  It could have stated that under one month of service, the notice period was nil.  In which case, they could have terminated the contract with no notice. 

In withdrawing a job offer (which can be the same as dismissing an employee), an employer must also be able to demonstrate that it is not due to a protected characteristic (race / nationality, religion / belief, sex, sexual orientation, transgender, age, disability, marital status, pregnancy / maternity) or because of their status as a trade union representative, health & safety representative or employee representative, or because they have asserted a statutory right or made a protected disclosure in the public interest.  Withdrawing job offers?  Easy right…. There’s more to it than you might think.

Before making any offer of employment, you should be comfortable that you are appointing the right candidate for the job, taking into account their skills and abilities, necessary qualifications etc.  Whilst situations arise where you need to recruit someone quickly, you should not take short cuts: consider agency workers or temporary workers until you are confident you have found the right candidate to appoint; and when you have found the right candidate, any offer of employment should be conditional upon evidence of their right to work in the UK, DBS check (if applicable), satisfactory references and subject to a probationary period, with a suitable notice of termination provision! 

One of the hardest tasks in management is recruiting the right people and a thorough, thoughtful and structured approach will narrow the chances of you being caught out if things go wrong





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