Withdrawing job offers: the risks and how to limit them

Can you withdraw a job offer once it has been made? We look at the risks employers face if they change their recruitment plans.

Sometimes, employers need to withdraw an offer of a job. The hiring situation may change because of a general recruitment freeze, a restructure within the organisation or a change of management. Or perhaps the funding for the post has been withdrawn.

Alternatively, the employer may become aware that the selected candidate is not suitable after all.

Job offers can be withdrawn after they are made, but there are risks associated with doing this; withdrawing an offer because circumstances have changed looks like bad planning and could affect the employer’s reputation. Furthermore, the employee may be able to bring a tribunal claim for breach of contract.

When is the contract of employment formed?

An employment contract is formed once an unconditional job offer is made and accepted. If the employer withdraws an unconditional job offer once it has been accepted, it is effectively terminating the contract and could be liable for damages for the individual’s loss.

Even though the individual has not started working, there will be a notice period due – just as with other terminations. Damages could amount to what the individual would have received if the employer had given proper notice – including any pay and benefits due if he or she would have started work during the notice period.

What if recruitment plans change?

If an employer’s recruitment plans change due to business needs and it has to withdraw job offers, it should notify the recruits as soon as possible to try to limit the damage and enable them to mitigate their potential loss.

The selected candidate might not have resigned from the current employer yet. Or, if they have, they may still be able to ask for their old job back – the sooner this is done the better.

Further, any notice period for termination of the contract is more likely to end before the individual would otherwise have started work, if the employer withdraws the job offer quickly.

Obviously, if the employer is withdrawing the job offer in these circumstances, it should explain its reasons and apologise.

Pre-recruitment checks and job offers

Most job offers are conditional on the new recruit satisfying certain conditions. For example, the selected candidate may need to provide references or evidence of qualifications, or they may need to demonstrate their right to work in the UK.

If the individual does not satisfy one or all of those requirements, the employer can withdraw the job offer without being liable for damages.

However, if it does not make clear that the job offer is conditional, and then withdraws the offer because the recruit has not satisfied one of its requirements, this will amount to a breach of contract and the employer may be liable for damages.

Therefore, offers of employment should make absolutely clear that they are conditional on certain requirements being met. Failure to do so can be costly.