It is a common assumption among employers that a job offer can be withdrawn without risk, provided the employee has not yet started work. A recent decision of the Employment Appeal Tribunal (EAT) is a timely reminder that this assumption can be a costly mistake.
The case highlights how, in certain circumstances, a binding contract of employment can exist long before an individual’s first day and that withdrawing an offer at that stage may amount to breach of contract.
Background to the case
In Kankanalapalli v Loesche Energy Systems Limited, the Claimant was offered a senior role as a Project Manager, with a proposed start date of 1 November 2022. The written offer set out key terms including salary, hours, holiday entitlement, bonus and pension, and confirmed a £3,000 contribution towards relocation costs.
The offer stated that employment was subject to satisfactory references, a right to work check and successful completion of a six‑month probationary period. Notably, no notice period was specified in the contract.
The Claimant accepted the offer in writing, via email, along with the new Starter Form, referee details, and right to work documentation. It was confirmed that the originals would be provided on his first day of employment.
The employer took preparatory steps for his arrival, including organising his security pass.
However, on 11th October 2022, just three weeks before the intended start date, the employer withdrew the offer due to a delay in a project. The decision was entirely unrelated to the Claimant, his suitability, or the outstanding checks.
The Claimant pursued a claim to the Employment Tribunal, citing a breach of contract.
Tribunal Findings
The Employment Tribunal dismissed the Claimant’s breach of contract claim. It accepted the employer’s argument that the offer was conditional and that, because references and original documents had not yet been received, those conditions had not been satisfied.
Dissatisfied with the outcome, the claimant escalated the matter to the Employment Appeal Tribunal, which disagreed with the Employment Tribunal and found in favour of the Claimant.
On appeal, it concluded that a binding contract of employment had already been formed when the Claimant accepted the written offer.
A key factor was the way the “conditions” were drafted. The EAT found that the references, right to work check and probationary period were grouped without distinction, and when read sensibly, were intended to apply after employment had begun, not beforehand.
As the EAT pointed out, it would be illogical for a probationary period to be completed before employment even starts. Read as a whole, the documents pointed to a concluded contract rather than a tentative or conditional arrangement.
Why notice mattered
Because the contract did not include an express notice period, the EAT held that a term of reasonable notice had to be implied.
In assessing what was reasonable, the EAT looked at the circumstances at the time the contract was formed, including the seniority of the role, the length and seriousness of the recruitment process and the fact that the Claimant was relocating internationally. Taking these factors into account, the EAT concluded that three months’ notice was reasonable.
The employer was therefore not entitled to simply withdraw the offer without notice or payment in lieu.
Why this matters for employers
This case sends a very clear warning that an accepted job offer can create legal obligations, even before day one. Many employers assume that conditional wording automatically protects them.
This decision shows that tribunals will look closely at how offers are drafted, whether core contractual terms have been agreed and what steps have been taken once the offer is accepted.
If a binding contract exists, withdrawing an offer without proper notice may expose the employer to a claim for damages, even where the employee has not yet started work.
In practice, the cost is rarely limited to notice pay alone. Disputes of this nature can involve lengthy litigation, management time, reputational damage and significant legal fees.
A Cautionary Tale
The employer in this case did not withdraw the offer lightly, yet found itself involved in prolonged and expensive litigation, culminating in liability for three months’ notice pay.
The lesson is clear. Withdrawing an offer of employment should never be treated as a risk‑free decision. Careful drafting at the outset and expert advice when difficulties arise can prevent what might otherwise become a very costly mistake.
For more information, please contact Jonathan Moreland at Jonathan.Moreland@swinburnemaddison.co.uk or call our employment law team on 0191 384 2441.
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