Can an employer withdraw an offer of employment?

The employer may wish to withdraw an offer of employment for a number of reasons, for example, because:

• Its business requirements have changed.
• It has unexpectedly received information about the applicant which casts doubt on the desirability of employing them.
• One of the matters on which the offer was expressed to be conditional, such as receipt of satisfactory references, has not been fulfilled.

However, if it withdraws an offer, the employer should be prepared for the disappointed applicant to allege that the employer's reason for doing so was unlawful (for example, that it was an act of discrimination). Consequently, employers should document their reasons for withdrawing an offer and retain documentary evidence that supports the reasons for the decision reached.

Unless the employee has previous relevant continuous service (for example, with the same or an associated employer), they will not have sufficient continuous service to bring an ordinary unfair dismissal claim.

However, there are certain exceptions. For example, most claims for automatically unfair dismissal can be brought where an employee does not have two years' continuous service. Employers must also be careful not to terminate the employment contract for a discriminatory reason. This is because there is no qualifying service requirement for bringing discrimination claims.

The withdrawal of an offer may also have implications in contract law since an employee may have a claim for breach of contract if the offer is withdrawn after it has been accepted. Notice money may be due - although there is a possible exception of statutory provisions applying - look out for our next alert on that….

It is theoretically possible that an employee could claim misrepresentation or negligent misstatement where an offer of employment was made with the intention or prospect of terminating the contract after the employee has served notice to their current employer but prior to employment with the new employer starting. However, we are not aware of any authority on this point and such a claim is likely to face significant hurdles, particularly where there is a comprehensive employment contract with an entire agreement clause.