Conditional job offers: are your terms clear enough?

The Employment Appeal Tribunal (“EAT”) has confirmed that conditions in a job offer do not always prevent a contract from being formed, and may limit an employer’s ability to withdraw an offer without notice even where the conditions have not been satisfied.

In this case, the Claimant was offered a project manager role. The offer letter set out key terms and stated the offer was subject to receipt of satisfactory references, a right to work check and a successful six-month probation period. The offer letter did not include any details about the notice period required to terminate the employment.

The Claimant accepted the offer by email (but never returned a signed copy of the offer letter), submitted new starter forms and provided documents confirming his right to work in the UK. Shortly before the start date, the employer withdrew the offer, due to project delays.

The Claimant brought a breach of contract claim. The Employment Tribunal initially dismissed the claim, concluding that because satisfactory references had not been received and the right to work check had not been completed, the offer was still conditional when the employer withdrew it, and there was no binding contract.

The EAT overturned that decision. It said the stated “conditions” were conditions subsequent (i.e. applying after the contract began), not conditions precedent (which must be met before a contract can come into existence). A binding contract had been formed and the employer did not have an unrestricted right to simply withdraw it. The EAT stated that the following factors supported this:

• The offer letter set out all the key terms of the contract: the start date, the salary, the hours of work, job description, holidays, bonus and pension.
• A document was provided to prepare the Claimant for the first day of employment, and arrangements were made for his security pass.
• The document in which the Claimant was asked to provide his reference details stated: "I understand that my employment may be terminated without the provision of satisfactory references".
• The three conditions in the offer letter included the satisfactory conclusion of a probationary period. That was clearly a condition subsequent, as it could only occur after the contract had started. The three conditions were all grouped together, without any differentiation between them as conditions precedent and conditions subsequent.

The EAT therefore found that the withdrawal of the job offer was in breach of contract. As the offer letter did not include notice terms, a reasonable notice period had to be implied. On the facts, three months’ notice was held to be reasonable, because of the seniority of the role, the length of the recruitment process and the relocation that was involved. The Claimant was awarded three months’ notice pay.

The key takeaway of this case for employers is to ensure that offer letters are clear about which conditions must be met before the contract starts (and which can be met afterwards). Employers should also ensure notice provisions are included in offer letters, and where relevant, confirm any shorter notice periods which will apply during the probationary period. 

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