So, you’ve made a job offer. It’s been accepted. Everything’s going great until you discover that the work you’d been banking on hasn’t come in. Or your biggest customer has gone belly up, without paying your last invoices. Suddenly, cash flow is a major problem and you can’t see how you’re going to pay your new employee. It would just be easier to retract the job offer, wouldn’t it? That way, they don’t start working for you and you don’t have to pay them.
Here’s the bad news.
Once you’ve made an unconditional job offer and it’s been accepted, a binding contract of employment comes into force. That’s even if the job offer has only been made and accepted verbally and the employee hasn’t started working with you yet. If you then withdraw the job offer, in the eyes of the law you are in breach of contract.
What does that mean in practical terms?
It means that you are liable for the consequences of that breach, e.g. notice pay. Withdrawing the job offer at this stage is the same as employing the person, having them start work with you and then dismissing them without notice, so you are liable to pay them for the notice period they would have had.
How to handle the communication
- Be honest about your reasons– no one is going to be unreasonable with you if you tell them upfront why you have to withdraw the offer
- Be clear about the lack of blame – make sure you tell the person that it’s not because of anything they have or haven’t done
- Acknowledge your liability – make an offer of payment, at least the statutory minimum of one week’s notice but if you can stretch to more then do
- Offer to keep in touch – if the communication goes well, offer to keep in touch with them and to keep them informed if things change. You never know what may happen but closing the door to any possibility of future contact could be short sighted.
Withdrawing job offers – points to note
Unless you’re psychic, you won’t be able to predict massive changes in your sales pipeline which affect your ability to employ someone. However, there are other reasons for withdrawing job offers such as the references being unsatisfactory or the employee not passing a crucial background check. The way to avoid problems with withdrawing job offers in these situations is to make the offer a conditional one. When you make the job offer, you make it clear (in writing) that the offer is conditional upon receipt of satisfactory references, or a satisfactory background check or whatever the condition is. That way, a conditional offer can be withdrawn easily and without liability if the conditions are not met.
If you have any questions about withdrawing job offers or any other HR related topic, please get in touch on 01487 815720.