A recent Employment Appeal Tribunal decision is a timely reminder that, without clear wording on conditions and notice, withdrawing an accepted job offer may expose employers to contractual liability.
Background
Mr Kankanalapalli (K) was offered a project manager role with Loesche Energy Systems Ltd in September 2022, with a proposed start date of 1 November 2022. The offer letter set out the key terms of employment, including salary, hours, benefits and relocation support and said the offer was subject to satisfactory references, a right to work check and completion of a six-month probationary period. K accepted the offer by email and began the onboarding process, providing referee details, new starter information and right to work documents.
Shortly before K was due to start, the employer, citing project delays, sought to postpone his start date until January 2023. When K did not agree to the revised start date and raised concerns about the arrangements he had already made to relocate, the employer withdrew the offer altogether. He then brought a breach of contract claim, but the Employment Tribunal initially dismissed it on the basis that the offer remained conditional and no binding contract had yet been formed.
The Decision
The EAT overturned the tribunal’s decision and found that a binding contract had been formed K accepted the offer. A key part of the court’s reasoning was that the stated conditions, including satisfactory references, a right to work check and successful completion of probation, were conditions subsequent, meaning that they were conditions that could bring an existing contract to an end, rather than conditions precedent that prevented one from arising in the first place. The wording of the offer letter itself set out key terms of the contract and reference was made in documentation that “the employment may be terminated without the provision of satisfactory references” The documentation did not say that until the references were provided there was no contract. The offer letter included the three conditions grouped together, including the satisfactory conclusion of the probationary period. The fact that probation could only be completed after employment had started, and that onboarding was already underway, strongly supported the conclusion that the conditions were a condition subsequent.
That meant the employer could not simply withdraw the offer for unrelated commercial reasons without giving notice. Because the offer letter said nothing about notice, the EAT implied a term requiring reasonable notice, and in the circumstances held that three months was appropriate. The individual was therefore entitled to damages equivalent to three months’ notice. In reaching that view, the EAT took account of the seniority of the role, the length of the recruitment process and the fact that K was relocating to the UK for the job.
Implications
For employers, the decision is a reminder that calling an offer “conditional” will not, by itself, prevent a binding contract from arising. If the intention is that no contract should come into existence until checks such as references or right to work have been completed, that needs to be stated clearly in the offer documentation and the wider recruitment process should reflect that position. The risks may be particularly acute for multinational employers hiring across borders, where relocation, immigration steps and pre-start onboarding can all strengthen the argument that the parties intended legal relations to arise before day one.
Where an accepted offer is silent on notice, a tribunal may imply a term requiring reasonable notice, which can exceed the statutory minimum depending on the circumstances. Employers should therefore review offer templates carefully, distinguish pre-employment conditions clearly, and consider express notice terms both the standard notice that will apply and any shorter period during the probationary period. ,
Conditional job offers should not be treated as risk-free: once accepted, they may already create contractual obligations and withdrawing them without proper notice can be costly.
Thank you to Alex Vincent for all her help in preparing this post