HR and the law: Revoking an offer of employment

Emma Burrows warns charities that if they retract an offer the employee has several potential remedies

Once an offer of employment has been made and accepted, a valid contract exists, even though the employee may not have started work yet. But what happens when a charity has made an offer that has been accepted and then wants to revoke it?

If a charity decides to retract the offer or terminates the contract before that person has started work, the employee will have three potential remedies.

The first is wrongful dismissal. If a charity dismisses an employee and, in doing so, acts in breach of its contractual or statutory obligations to give the employee notice, then it becomes liable to pay that employee damages for wrongful dismissal.

If a contract of employment is terminated by a charity giving no notice or shorter notice than is provided for in the agreement, the employee is entitled to damages to compensate for the failure to give the correct amount of notice.

However, from an employee's point of view, bringing a wrongful dismissal claim may incur significant legal expenses and, given the limited amount of damages they would receive, is probably not generally advisable.

The second option is recovery of notice payment. The employee will be entitled to the notice payment due under his contract. However, the employee is also under a duty to take all reasonable steps to mitigate his loss by seeking other employment. If, as may well be the case, the employee is still employed by his or her old employer and working out a notice period, the sums received during this period will be taken into account in calculating the loss that the employee has suffered.

If the employee is still in employment, it is worth noting that the damages will probably be fairly insignificant.

The third is unfair dismissal. If the reason for dismissal is an "inadmissible reason" (which includes dismissing an employee for union-related reasons or health and safety-related reasons) there may be a claim of unfair dismissal.

If there is an inadmissible reason, then the usual one-year qualifying period of employment for unfair dismissal claims is unnecessary.

 - Emma Burrows is a partner and head of the employment group at Trowers & Hamlins solicitors.

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