What are the pitfalls when you rescind an offer of employment?

You make an offer of employment, subject to references and these come back unsatisfactory.

What do you do?

Withdraw the offer of course.

But what are the pitfalls when you rescind an offer of employment?

As soon as an offer is made, your prospective employee hands in their notice and so, should you withdraw, they are essentially left with nothing.

Where a disgruntled employee decides to pursue the matter, the basis of a claim is their notice period.

This is why we recommend issuing the contract of employment issued along with the offer letter, so there is no ambiguity on what that notice period actually is.

The case of McCann v Snozone Limited (2015) provides useful guidance on the approach generally taken by UK courts where there is no written contract.

Mr McCann received a verbal offer from Snozone, which he accepted.

Snozone later denied that a formal offer had been made and McCann brought a successful claim for breach of contract.

Even though no notice period or salary had been agreed, the tribunal found he was entitled to a reasonable contractual notice period of one month. Based on an expected salary of £28,000-£30,000, Mr McCann was awarded £2,708.

Damages arising from a breach of contract are not necessarily limited to salary for the period of notice only but are meant to place a claimant in the same position as if the contract had been properly performed.

This means that an employer can be subject to claims of future losses if new employment isn’t quickly found or loss of bonus or commissions which the employee may have been entitled had they remained.

Typically though it is high value, senior employees who pose the biggest risk in these situations although the McCann case demonstrates that claims are open to all.

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