The importance of clarity when making a conditional job offer

There are a number of steps a job applicant needs to follow before they can usually start their new role. This case highlights the importance of clarity in communicating the conditions that need to be fulfilled when the employer makes a conditional job offer.

On 22 September 2022, Loesche made a job offer to Mr Kankanalapalli (known as ‘Swamy’) for the role of project manager to start on 1 November. Swamy accepted it four days later after Loesche confirmed that relocation costs would be paid and recommended he entered into a 12-month rental agreement.

Upon accepting the job offer, Loesche confirmed that they looked forward to Swamy joining the company. Following this email correspondence, Swamy sent copies of his right to work documents and the names of his referees. On 11 October, however, Loesche withdrew the job offer.

Swamy 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for breach of contract on the basis that a contract had existed between him and Loesche at the time the job offer was withdrawn.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 the employment contract.

The claim was dismissed at the Employment Tribunal (‘ET’) who found that the job offer consisted of the conditions of the right to work and referees which had not been fulfilled at the time the job offer was accepted by Swamy.

However, the Employment Appeal Tribunal (‘EAT’) overturned this decision and found in Swamy’s favour awarding him three months’ notice pay. This was considered to have been the appropriate notice under the contract of employment.

The facts

• Swamy 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 as the start date. Loesche also sent a new starter information form to Swamy.
• The offer letter was subject to receipt of satisfactory references, a right to work check and a successful six-month probation period. Swamy was asked to return a signed offer letter. The letter didn’t mention notice to proceed was required before a job offer could be made by Loesche.
• At trial, Loesche argued that the notice to proceed was discussed at the interview and was a condition of the employment. Swamy 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 – Swamy 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, Swamy 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 – Swamy completed the new starter form and sent a signed copy to Loesche. Swamy also sent his referees’ information.
• 6 October – Swamy sent copies of his right to work documents, and he was advised by Loesche 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 – Loesche withdrew the job offer.

Employment Tribunal claim

Swamy 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 Swamy as per the terms of an employment contract typically used by Loesche.

EAT judgment

At the EAT, Judge Walker 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;
• Loesche was in breach of contract by terminating it without reasonable notice; and
• reasonable notice in terms of the role and seniority of Swamy was held to be three months.

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

Lessons

• Ensure clarity during the interview process of when an ‘offer’ is made by setting out the conditions required for an employment contract to commence.
• Follow 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 have been satisfied.
• Reference requests – make it clear that the receipt of referee details does not constitute the referees 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 and are not industry wide.
• 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 completion of the probationary period.

Cases like this are decided on their unique set of facts. Please, therefore, seek legal advice on drafting offers of employment, or get in touch if you would like to discuss anything else touched upon in this article.

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