The importance of clarity when making a conditional job offer

There are a number of steps to be made before someone starts their new role. This case highlights the importance of clarity when the employer is making a conditional job offer.

On 22 September 2022, Loesche made a job offer to Mr Kankanalapalli (‘K’) for the role of project manager to start on 1 November. He accepted it four days later. On 11 October, however, Loesche withdrew the job offer.

K brought a claim for breach of contract on the basis that a contract had existed between him and Loesche at the time the job offer was withdrawn. He felt the conditions of employment had all been satisfied, and that by withdrawing the job offer without giving him the correct notice as required under the contract, Loesche had breached it.

The claim was dismissed at ET but overturned at EAT.

The facts

• K applied for a job for project manager and attended two online interviews with Loesche on 10 August and 22 September 2022
• On 23 September, Loesche sent a job offer via email proposing 1 November 2022 as the start date. Loesche also sent a new starter information form to K
• The offer letter was subject to receipt of satisfactory references, a right to work check and a successful six-month probation period. K was asked to return a signed offer letter. The letter didn’t mention notice
• At trial, Loesche argued that the notice to proceed was discussed at the interview and was a condition of the employment. K denied this was discussed. Loesche did not confirm that the notice to proceed was a condition of any job offer in the offer letter
• 23 September – K raised some queries and asked about relocation costs, with Loesche advising him to enter into a 12-month rental agreement
• 26 September – Loesche responded on confirming relocation costs
• On the same day, K responded to confirm that the terms were acceptable and stated that his email confirmation should be treated as an acceptance to the job offer
• 27 September – Loesche emailed to say: “that is excellent news and we look forward to you joining us.”
• 2 October – K completed the new starter form and sent a signed copy to Loesche. K also sent his referees’ information
• 6 October – K sent copies of his right to work documents, and he was advised that the originals will need to be checked on his start day. Loesche also confirmed that there would be a delay with the start date
• 11 October – confirmation that the offer had been withdrawn.

Employment Tribunal claim

K filed a claim at the ET for breach of contract. This was dismissed by the tribunal on the findings that there was a conditional offer of employment and neither of the conditions (right to work and references) had been met – there was no contract of employment and therefore no notice was required to be given to K as per the terms of an employment contract typically used by Loesche.

EAT judgment

Judge Walker on 20 January overturned the ET’s decision.

The EAT found that:

• the conditions relating to the contract were subsequent
• reasonable notice would have been three months and a term should be implied to that effect
• the contract was concluded and the three conditions were all subsequent, following the existence of a contract rather than terms which determined the existence of a contract of employment
• the respondent was in breach of contract by terminating it without reasonable notice
• reasonable notice in terms of the role and seniority of K was held to be three months.

The EAT held in substitution of the ET’s findings that K claim for breach of contract was successful and Loesche was ordered to pay the sum of three months’ notice.

Lessons

• Clarity during the interview process of when an ‘offer’ is made by setting out the conditions required for an employment contract to commence
• Following up with a clear job offer letter – making it clear that the offer is subject to the conditions previously discussed and there would be no employment contract unless all the conditions were made
• Reference requests – make it clear that the receipt of referee details does not constitute this condition being met
• Right to work – make it very clear that any job offer is conditional on the applicant proving their right to work and the employer confirming this by seeing the originals. The right to work check should be completed before the start date and not on the start date to avoid situations like Loesche
• Even if your notice provisions are standard, they would not amount to custom and practice if they just apply to your business, but custom and practice in this context would be reliant on industry custom and practice
• Loesche correctly set out the importance of the probation period being completed satisfactorily. This, however, was not a condition of the employment contract coming into existence but a condition of the employment continuing after six months.

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