For most employers, recruitment is a fairly straightforward process: you interview a candidate, offer a job, sign a contract, and the rest is history.
But life—and business—is unpredictable.
Strategies change, better last-minute candidates come up, and sudden hiring freezes are increasingly common as businesses try to reign in spending.
The result is sometimes a painful job offer retraction—and it’s not an uncommon predicament, Gareth Matthews, an employment law partner at MLP Law tells Fortune.
“In most cases, job offers are retracted either because the business’ plans have changed or because the candidate didn’t turn out to meet the job requirements,” he adds.
No matter what the reason is, Matthews offers guidance for employers on how to pull a job offer without falling foul of the law.
First up, get the offer right
“A good defense is the best offense, so make sure you always make any job offers conditional,” Matthews advises.
He adds that employers must always make it clear to candidates that any job offer is subject to the conditions being met and that they shouldn’t resign from their old job until then.
In most cases, conditions of employment will include having the right to work in whatever country you’re based, providing references and demonstrating proof of relevant qualifications.
Employers should think ahead about what they would expect from their new hire, in order to touch all bases and make the conditions as detailed as needed.
For example, Matthews has seen some cases where job offers were retracted because they required someone to be physically able to do certain tasks. “If a medical shows they can’t perform those tasks, and the job offer was conditional on them doing so, then a job offer may be withdrawn.”
Likewise, if you know that your new hire will need to drive to stockists, then it would be wise to include having a driving license as part of the conditions of the job offer.
By laying out the conditions of a job offer, it’s much easier and quicker to then retract the offer if the candidate doesn’t deliver than if the offer made was unconditional or if conditions weren’t specified.
What to do if you didn’t make the job offer conditional
“If a job offer has been made unconditionally, or if it doesn’t specify certain conditions, then it’s not as easy to withdraw it,” Matthews warns.
Essentially, a job offer is legally binding. Without conditions laid out, you enter into an employment contract with the candidate at the point of making the offer.
At that stage, like any other employee at your firm, their “employment contracts can only be terminated on certain grounds and, in the majority of cases, with notice,” Matthews says.
“You’d then need to go through a dismissal procedure if you wanted to remove the candidate from their post, to effectively terminate an employment which in practical terms hasn’t really started.”
Plus, unless you want to risk being sued for breach of contract, Matthews adds that you’ll probably need to pay the fired new hire for their notice period.
The big risk: Discrimination
When it comes to retracting a job offer, one of the biggest risks businesses (in English-speaking countries, including the U.S. and U.K.) should be aware of is discrimination.
“You need to be careful that you don’t retract a job offer in such a way that it’s seen to be as a result of discrimination – or even to refuse to make an offer because of an assumption that conditions of employment won’t be met,” Matthews says.
It’s why being specific about the conditions you’re asking a candidate to meet when offering the job is so important.
If you were to assume that a worker won’t be fit enough to do a physically demanding job and then retract or not make an offer based on that, that would be unlawful.
With over 40 years of experience with HR and employment law issues, David D. Schein, President and General Counsel at Claremont Management Group, agrees that in the States “withdrawing an offer of employment is a difficult issue and can definitely lead to discrimination or breach of contract claims.”
What’s more, even though the majority of states have an “employment at will” law – employers have the ability to dismiss an employee for any reason, and without warning, as long as the reason is not illegal.
“A useful statement in the offer letter is to always state that the offer is for at-will employment and that neither the offer letter or any subsequent employment constitutes a contract of employment,” he tells Fortune.
Schein also echoes that “the first protection is that no offer of employment should ever be unconditional” but this still comes with one major drawback: “If an offer is withdrawn, it would be normal for the candidate to ask what reference or information caused the revocation of the offer.
It’s why Matthews thinks honesty is always the best policy.
“This can help protect you from discrimination claims,” he added.
“In the absence of a business reason, a candidate may jump to wrong conclusion and claim that they were in line to get a new job but you later discovered that they were gay or disabled or had any other protected characteristic, and you then withdrew the job offer.”
