Can employers withdraw job offers?

In what circumstances can you withdraw a job offer? If you do, will you need to pay notice?

Recent case

Recent reports have suggested that, in McCann v Snozone, Snozone wanted to withdraw an offer made by a recruitment agency and accepted by Mr McCann.

The discussions between the agency and Mr McCann were only verbal, but an employment contract was still in place. This led a tribunal to find that Snozone could only terminate the contract by giving notice (or paying in lieu of notice).

Even though the parties hadn't agreed salary, start date or notice period,the tribunal apparently found that salary was likely to be at the mid-point of the advertised salary range, and awarded one month's notice (which they thought was reasonable in the circumstances).

The case is a good reminder of the importance of unambiguous communication in the recruitment process.

Withdrawing job offers: in practice

Have effective systems in place with agencies to ensure no offers (even verbal ones) are made until a final decision has been reached on recruitment.

As employment contracts can be formed verbally, consider a policy of only making job offers in writing, and communicate this to all staff involved in recruitment.

If you want to withdraw a job offer, your options will depend on what stage you are at in the process:

• You can withdraw an offer before an individual has accepted it, but you should keep clear records to prove that it was withdrawn before being accepted.
• Where appropriate, ensure job offers are conditional on, for example, satisfactory references or candidates proving certain qualifications. If one or more of these conditions are not met, you can withdraw the offer even if the individual has accepted it.
• Once an individual has accepted an offer, and any conditions have been satisfied, there will be a valid contract of employment. You must then give notice to terminate the contract or pay in lieu of notice. The amount of notice will be as per the terms of the contract (and at least the statutory notice of one week if they have been continuously employed for at least one month). The candidate will be due payment in respect of the time from when they were due to start work. So, if they are entitled to four weeks' notice under their contract, and you issue notice one week before their anticipated start date, you will need to pay them in respect of the three weeks from that start date. Obviously, you could ask them to come to work for that three week period - if they refuse you would not then need to pay them for that period.
• Clearly, if an employee is guilty of gross misconduct, you can terminate without notice.

Always take care to document your reasons for withdrawing any offer, to support your position in the event an individual alleges, for example, that it was for a discriminatory reason. Also consider having probationary periods during which employment can be terminated on shorter notice.

Our Workbox page Making a job offer contains more information on what to include in offer letters; time limits for accepting offers; what conditions can be included in offers; and managing employees who lie during recruitment. It also includes a template offer letter and letter withdrawing a conditional offer, along with style employment contracts.