Relief is often sighed once a preferred candidate has accepted an offer of employment.  Those sighs can sometimes turn to groans if that candidate is not as perfect for the role as originally thought or the need for that candidate has unexpectedly waned. 

There are many reasons why an employer may wish to withdraw an offer of employment.  However, withdrawing an offer of employment is not without its risks.  Employers often mistakenly think that they can simply withdraw an offer of employment if a candidate has not started working yet.  This is not always the case.  The timing, the reasons and the agreement made with the candidate can all have an impact on the level of risk an employer is taking in withdrawing an offer.  These factors are explored below.   

Can I withdraw an offer of employment before it has been accepted by a candidate?

Subject to one caveat, an offer of employment may be withdrawn at any time before it has been accepted by a candidate. The reason for this is that normal contractual principles apply to employment contracts.  Like with any other contract, if an offer has not been accepted, there is no binding contract in place.

If the reason for withdrawing an offer is discriminatory on any of the nine protected grounds (outlined below), the withdrawal of an offer could leave a prospective employer open to a successful claim under the Employment Equality Acts.  

However, in circumstances where an employer can prove that the withdrawal of an offer was unrelated to any of the nine protected grounds, an offer of employment can be withdrawn with little risk before it has been accepted. 

The candidate has accepted our offer, what risks are there to the company if we withdraw the offer?

Once a candidate has accepted an unconditional offer of employment, a binding contract of employment exists between the employer and the candidate, even if the candidate has not yet started working with the employer. 

If the employer decides not to proceed with hiring the candidate, the employer should give the candidate the notice to which they are entitled under the contract.   Failure to do so would be a breach of contract and the candidate may be entitled to damages for that breach.   The value of the candidate’s claim would generally be the net salary and any benefits that the candidate would have received during their notice period.

Newly recruited employees are usually subject to a probationary period which provides for a shorter notice period if dismissal occurs during the probationary period.  In circumstances where the notice period is relatively short, aggrieved candidates are less likely to pursue a breach of contract claim against a prospective employer as any award of damages is likely to be low. 

However, if an offer of employment has been made to a more senior candidate, that offer may include a longer notice period.  In those circumstances the value of the candidate’s claim could be high, which may increase the likelihood of that candidate taking a breach of contract claim.   

What if the offer was verbal and the candidate accepted the offer but the company no longer wants to proceed with hiring the candidate?

Contracts do not necessarily have to be in writing to be binding.  While oral contracts are more difficult to prove, if both parties intended to be bound by the agreement, this is sufficient to create a legally binding contract. 

If the company withdraws an unconditional offer, it is at risk of a breach of contract claim as outlined above.  However, in circumstances where the offer was oral, the details of the probationary period and the notice period may not have been discussed.  Accordingly, such a claim is likely to be more difficult for a candidate to prove. 

If an oral offer is made to a candidate, it should be made clear that it is subject to a formal offer being made to the candidate and the satisfaction of pre-conditions that should be explained to the candidate.

What reasons are “high-risk” for withdrawing the offer of employment?

The prospective employer should always consider the reasons why the offer is being withdrawn to ensure that the reasons are not tainted by discrimination.

If the reason for withdrawing the offer is based on one of the nine discriminatory grounds (gender, civil status, family status, sexual orientation, religion, age, disability, race and membership of the Traveller community), the candidate may take a claim against a prospective employer under the Employment Equality Acts (“the EEA”), even if they have not yet started working with the employer.

The EEA prohibits discrimination against a prospective employee in relation to access to employment.  If a candidate can establish that he or she was unsuccessful in the recruitment process or that an offer was withdrawn because of one of the nine grounds, that candidate can be awarded up to €13,000 compensation in an employment equality claim.

Risks are increased if an offer is withdrawn after the candidate has undergone a medical assessment for the job, for example.  It is highly likely that any decision to withdraw an offer of employment on medical grounds will give rise to a claim for disability discrimination.

Similarly, if a candidate informs you that she is pregnant after an offer of employment has been made, the withdrawal of that offer is likely to leave an employer vulnerable to a successful discrimination claim on the grounds of gender. An example of such a case is Martina Ryan v Moog Limited Dec – E2011 - 027.  In this case the complainant alleged that the company withdrew an offer of a ten month contract because she revealed she was pregnant.  The Tribunal found that there had been discrimination and awarded her compensation of €12,697.

Accordingly, prior to withdrawing an offer of employment, an employer should always:-

• ensure that there are no discriminatory reasons for the withdrawal; and
• document the reasons for the withdrawal so that it has evidence to counter any allegation of discrimination, should one be made.

Should offers of employment be made subject to pre-conditions?

Yes, in order to reduce the risk of a breach of contract claim being made against the employer, the oral offer, the offer letter and the contract of employment should include any conditions to which the offer is subject.  These conditions may commonly include:-

• receipt of satisfactory references;
• confirmation that the candidate holds the qualifications that they claim to have;
• confirmation that the candidate is free from any restrictions from previous employment which would prevent them from starting work with the prospective employer;
• confirmation that the candidate has the appropriate visa to work in Ireland;
• passing professional examinations;

A pre-condition such as passing a medical examination should be considered carefully before inclusion in an offer letter. If the employment does not proceed due to the results of a medical exam, the employer will be left exposed to a claim for disability discrimination.  

A recent case that highlights the importance of making an offer subject to pre-conditions:

In the recent High Court decision of Genockey v The Governor and Company of the Bank of Ireland [2017] IEHC 498, a successful applicant’s offer of employment was withdrawn because the she had failed Maths in the leaving certificate.

In this case, the plaintiff had sent her unsolicited CV to the defendant employer.  Her CV included information that the plaintiff’s leaving certificate results consisted of 3 (honours) 4 (passes).  In reality the plaintiff had received 4 passes and 3 fails in pass level subjects.  However, the plaintiff submitted that the error in her CV was because she had forgotten her results, which the Court accepted.

The plaintiff was invited to interview and was asked to bring with her a completed application form and original proof of her qualifications. The plaintiff attended interview and brought with her a completed application form. She did not bring proof of her qualifications. 

The defendant employer’s application form which was completed by the plaintiff, prior to interview, included the following:-

1. a statement that applicants will undergo a pre-employment screening process;
2. prior to commencing employment, the successful candidate must provide original documentation in relation to the required educational qualifications;
3. a declaration to be signed by the applicant which states: “an offer of employment is subject to verification of educational qualifications, proof of identification […] Any deliberate misrepresentation or omission could result in the withdrawal of any offer of employment (if successful), or in dismissal should employment have commenced.”

Following interview, the plaintiff received a call from the defendant employer to confirm that she was successful at interview.  A point of dispute arose as to the precise wording used by the defendant employer on the call. The plaintiff contended that the offer was an unconditional offer, while the defendant contended that the offer was most likely make subject to successful completion of pre-hire screening checks.  The plaintiff said that she would give her notice to her current employer and agreed to commence in two weeks. 

Subsequent further calls were made to the plaintiff by the defendant requesting a reference from her current employer as well as proof of educational qualifications, including her leaving certificate results.  She also received a job offer in the post from the defendant employer which stated:- “I am pleased to formally offer you a position of Administrator as a fixed-term employee with the Governor and Company of the Bank of Ireland […] This offer is subject to receipt of two satisfactory references, one from a previous employer and one from your current employer, Medical Assessment, verification of your qualifications and the information you have provided on the Application Form”.

Having provided the references required and her leaving certificate results, the plaintiff received a call from the defendant stating the defendant employer could no longer offer her the position of Administrator, as she had failed Maths in the leaving certificate.

The central allegation of the plaintiff was that the defendant represented to her that she had an unconditional offer of employment and that she was advised to hand in her notice with a view to starting her employment with the defendant.

The defendant relied on the express limitations to the offers of employment contending that they made it clear that the offer was subject to pre-conditions.

The High Court referred to a number of cases including Forshall & Fine Arts & Collections Ltd v Walsh (unreported, High Court, Shanley J., 18th June, 1997) and King v Aer Lingus Plc. [2002] 3 I.R. 481.

In Forshall & Fine Arts & Collections Ltd, Shanley J states that:

“A party seeking damages for negligence misrepresentation must establish that the representor failed to exercise due care in making the representation as a result of which representation the person to whom it was made was induced to enter into the particular agreement and suffered damage in consequence of the inaccurate representation.”

In King v Aer Lingus Plc [2008] 4 I.R. 481, it was held that there is a duty of care to avoid making negligent representations of statements in pre-contractual, negotiation states, which will have the effect of inducing a person to act to their detriment by leaving a previous position.

In the current case, the High Court held that the plaintiff had not established that the defendant failed to exercise a duty of care in making a representation to the plaintiff to enter into the agreement, acting to her detriment.  The Court held that “at all stages of the hiring process, it was made clear that the job offer was conditional upon the plaintiff meeting certain requirements; in the declaration she signed at application stage; at interview state; when she was offered the job on the phone; when she was sent a written offer in the post.”

Accordingly, the Plaintiff’s claim failed.

This case illustrates the importance of including pre-conditions at all stages at the recruitment process.

Example clause setting out pre-conditions to employment

Pre-Conditions to Appointment

Appointment is conditional on the satisfaction or waiver by the Company of the following conditions:-

• The provision of [two] references to the Company which the Company deems to be satisfactory, one of which should be from your current employer
• The provision of documentary evidence of your qualifications;
• Confirmation that you are free form any obligations owed to a third party which may prevent you from starting work or properly performing the duties of your new position.

The Company may at its sole discretion waive any of the conditions to appointment in whole or in part at any time.

For the avoidance of doubt, in the event that the above pre-conditions are not satisfied or waived by the Company, the offer of employment shall be deemed withdrawn.