Check the Employment Contract

As always, the most important factor is to check the contract of employment itself. Is the contract conditional on the employee meeting certain terms and conditions or is it an unconditional offer? If the contract is conditional and the employee has not met all the conditions, then it may be that the contract can be rescinded on foot of the relevant terms and conditions not being met.

Withdrawing the Offer of employment before acceptance date

If a contract has not yet been accepted by the employee, then it cannot be seen to be legally binding. As with the general principles of contract law, either party can rescind an offer before it is accepted. However, it is important for employers to ensure that the grounds upon which they are rescinding the offer are not grounds which could lead to a potential discrimination claim under one of the nine grounds provided for in the Employment Equality Acts 1998-2015.

Withdrawing the Offer of employment after acceptance date

Should the contract’s conditional terms be met or should the contract be one which is unconditional, then once the contract is signed by both parties it is legally binding. Any changes that are to be made to the contract must be expressly agreed by both parties. It would be rare for an employee to push out the start date of a contract as they would be losing out on financial income earned in the delayed period. However, the employee may have personal reasons for wishing to delay such as an opportunity to travel or upskill in that time, so it is worth raising with the employee as express agreement from both sides is the easiest way to delay a contract start date.

Where there is a legally binding contract in place and the employer rescinds the contract before the employee start date, the employee may bring a wrongful dismissal claim or a breach of contract claim against the employer.  It is important to note wrongful dismissal and breach of contract claims  cannot be brought before the Workplace Relations Commission and must be brought before the civil courts, the jurisdiction of the court will depend on the value of the claim the employee will be seeking, which ordinarily would be for the amount they are entitled to under their notice period and any accrued benefits such as annual leave or sick leave during this time. Where an employer is rescinding an offer where there is a legally binding contract in place, the employer should give the candidate the notice to which they are entitled under the contract.

However, what if the employer wishes to delay the start date of a signed contract, but the employee wants to start on the original date?  The employee will ordinarily have little rights in this scenario, again depending on the content of the contract which was issued to them. If the employee does not agree to the delay, one option for the employer is to terminate their employment on day one and makes a payment in lieu of notice and including any accrued benefits. This places the employer in a strong position should they wish to delay an employee’s start date, as you would expect any normal employee would be agreeable to a delay rather than instant termination.

So, what compensation can the employee seek

If an offer is rescinded before an employee commences work under their contract, then the compensation they can seek will more than likely be limited to the notice period in their contract and any benefits they would have accrued during the time of their notice period. Where an employee has a long notice period and is in a role which commands a significant salary, then this could still prove costly for the employer, especially when legal fees are also factored into the equation.

The Unfair Dismissals Act 1977-12015 does not apply to employees until they complete 12 months of service, apart from in limited circumstances. However, it is important to remember that the Employment Equality legislation applies to prospective employees also and therefore there may be some exposure for an employer if there was any discriminatory element to the rescinding of the contract.

What if the contract was not in writing

Under the principles of contract law, a contract does not expressly have to be in writing. However, where a contract is not in writing then should the employee wish to take a claim for breach of contract it will be up to them to prove the oral terms of the contract have been breached, which may prove difficult to do before the courts.

Practical Advice for Employers

Ultimately, there is going to be some potential liability for the employer in the scenario in which they wish to rescind a legally binding contract. To avoid any potential liability, employers should only issue contracts of employment once they are satisfied that all pre-conditions have been met by the employee and that any verbal offer extended is clearly stated to be conditional upon a formal offer in writing.