We have been asked on many occasions to provide HR advice around recruitment and contracts of employment. On one such occasion, a company had withdrawn a job offer they had made but was being threatened with a breach of contract by the individual.

The situation had arisen where the company was looking to increase its workforce and had offered a job to an individual. Unfortunately a week later the company lost a major contract and withdrew the job offer. The individual had resigned from their current job and was now threatening a breach of contract for withdrawing the new job offer.

The company thought that as the individual had not yet joined them, and no written contract of employment had been provided, the individual therefore had no contractual rights. Unfortunately for the company, in situations like this it is not the case. Once an offer is made and accepted a contract is formed, regardless of whether or not the individual has actually started working. Fortunately in this case, the individual was able to withdraw their resignation with their current employer and did not proceed with any action.

So in general, what do employers need to be aware of:

1. i) When a job offer is withdrawn, employers are still bound by the contractual terms that they have already agreed i.e. they may have to award the pay and benefits agreed for a period of notice. (Note: this does not include situations where job offers are conditional e.g. if an offer is withdrawn due to unsatisfactory references being received, or failure to pass a medical)
2. ii) Employers can give notice to terminate the contract. It will still be obliged to pay the employee and award benefits, even though the individual is not working for them, but this can be limited to the duration of the notice period

If you would like to discuss any aspect of this HR article in more detail, please contact our HR consultants at info@connectivebusiness.co.uk