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Problems that can arise from retracting unconditional job offers

Job offers can be withdrawn but there are factors to consider if you want to avoid finding yourself liable for costly employee damages

A formal contract begins between employer and employee as soon as an unconditional formal offer of employment is accepted. There are many reasons why an employer may need to retract a formal job offer; for example, the company may experience an unexpected suspension of recruitment, the business may be subject to a full restructure, or management changes could be a catalyst for adjustments in a particular department.

An employer may also simply change their mind about whether their selected candidate is the best individual to fill the vacancy. An employer can certainly retract an unconditional offer; however, there are several considerations that should be noted and planned for.

Perhaps most importantly, withdrawing a job offer that has been accepted means that an employer is essentially ending a formal contract with the new employee. As such, the employer may be responsible for any subsequent losses the employee may suffer as a direct result of this termination.

Regardless of whether the employee has begun their new job, the employer will be required to give them a period of notice. This may mean paying the individual what they would have earned for the duration of the notice period in addition to supplying any other benefits they would have received as a worker within the company.

If the situation is not handled with appropriate care, the employee may be within their rights to begin a tribunal claim. Attempting to breach a contract without offering apologies or appropriate help to an individual would be inappropriate, unwise, and potentially very damaging.

Notifying a new employee of any changes to recruitment or business structure immediately is essential. An employer may be concerned that such a motion will indicate an error with regard to preparation and forecasting; however, reducing the damage an individual may face is more important.

If an individual is informed quickly, they may be able to avoid handing in their notice to their current employer or be able to negotiate a way to stay in their current role. If this was the case, the new employer would not be liable for any costs because the new employee would still be working the notice period of their current role and would not have started their new job.

An employer should always fully clarify the situation to an individual and apologise for any inconvenience or disappointment caused.

There are many benefits to offering jobs on a conditional basis. This may mean that a formal offer is subject to references or evidence supporting the potential employee’s claims of educational achievements. If the prospective employee is unable to provide such evidence for any reason, the employer is within their rights to retract the offer and not find themselves subject to any potential damages.

The onus is on the employer to make it clear to the potential employee that the offer is a conditional one. If the job offer is withdrawn and the employee was not aware of its conditional nature, employers may find themselves embroiled in a costly battle for damages.

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