Employment Alert – New Risks for Job Offer Withdrawals
What’s happening?
A recent Employment Appeal Tribunal (EAT) decision in the case of Kankanalapalli v Loesche Energy Systems [2026] EAT 49 has highlighted a significant risk for employers who make a job offer subject to pre-employment conditions (such as satisfactory references or right to work checks), but then withdraw the job offer before these conditions have been met.
Traditionally, employers have assumed that where an offer or contract is expressed to be “subject to” certain conditions, it does not become legally binding until those conditions are fulfilled. On that basis, employers have believed they could withdraw offers without financial consequences as long as these conditions have not yet been met. The EAT has made clear in this recent case that this assumption is unsafe. Depending on how an offer letter or contract is drafted, it may be legally binding even where conditions remain outstanding. Withdrawing an offer in such circumstances may amount to a termination of contract, triggering an obligation to pay full contractual notice to the individual
Why is this important?
This decision highlights the importance of drafting offer letters and contracts precisely and considering appropriate notice periods, particularly when including pre-employment conditions.
The case makes it clear that an employer may be liable for notice pay when withdrawing a job offer, even where the individual has never started work, if an offer letter or contract does not make it explicitly clear that:
- any pre-employment conditions are true conditions precedent which must be met before the contract becomes binding; and
- all conditions are capable of being met before the role starts; and
- no binding contract will come into existence unless and until those conditions are satisfied.
Employers who require unconditional acceptance of an offer before completing checks are increasing the risk of creating a binding contract from the moment the acceptance is given.
Historically employers have often got around this by withdrawing the job offer with enough time before the job was due to start so that a “notional” notice period could take place before the proposed start date. I.e. if the notice period was one week, and the role was withdrawn at least one week before the proposed start date, the person had technically been given the required notice (albeit the notice period ran before they’d started work). This approach may still work where job offers and contracts include a shorter notice period for staff during their probationary period.
The real risk arises for senior employees who have a standard notice period from the start of their employment, when it may not be possible for any “notional” notice period to expire before the person was due to start the role. An individual in this situation may be able to claim a full notice payment without ever having started work.
Many standard offer letter and contract templates do not go far enough in dealing with this risk. Employers relying on such templates may therefore be exposed without realising it.
What should you do?
Prepare: Review your offer letters and contracts to ensure all pre-employment conditions are expressly drafted as conditions precedent and state unequivocally that no contract will be formed unless and until all conditions are satisfied.
Consider: Consider carefully the length of notice periods in all contracts and whether shorter initial notice periods should be included in all new contracts to add additional protection.
Track: Put in place systems to track compliance with pre-employment conditions and ensure they are met before an employee starts work. Follow up on the conditions and take steps if they are not met.
Review: Always check the job offer and contract terms before withdrawing a role, to assess if any notice payment may be due and mitigate any risks.
Take Advice: If you require advice on how these changes may affect your business or would like support preparing for implementation, please contact [email protected] who can put you in touch with one of our specialist employment lawyers.
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Disclaimer
This information is intended for general informational purposes only and does not constitute legal advice. We recommend seeking professional advice before taking any action on the information provided. If you would like to discuss your specific circumstances, please feel free to contact us on 0800 2800 421.
