As an employer, there may be times when you need to withdraw or rescind a job offer. For example, your business may no longer be in a stable financial position to hire new staff, or you might discover something unfavourable about a job candidate. There is a specific period where you can rescind an offer without repercussions and also times when you should not rescind a job offer as it would amount to a breach of the employment agreement. This article will explore when it is appropriate to rescind a job offer and alternative measures your business can take.
Rescinding a Job Offer
There may be times when you offer a position that is conditional on the prospective employee meeting certain conditions. Common conditions are criminal background checks, credit or reference checks. If you learn something unfavourable about the candidate during these checks, you may legally rescind the offer. You should inform the candidate that your decision was based on the outcome of these checks and remind them that these pre-conditions were clearly stated in the offer letter.
You can also rescind a job offer if the applicant has not yet accepted the offer. However, if the job offer has been accepted and you choose to rescind it, you risk opening your business to a personal grievance claim.
Is It Too Late to Rescind?
Suppose the prospective employee has already accepted the offer and agreed on the terms of the employment. Once the candidate meets any conditions you set and signs the employment agreement, the agreement becomes binding. Consequently, they are entitled to the same rights as if they were an employee.
Similarly, the prospective employee might verbally accept the terms of the employment, and your business is yet to provide a written agreement. In this case, the agreement would still be binding, although acceptance may be harder to prove without written evidence.
Rescinding a Job Offer After Acceptance
Once an employee accepts the terms of the agreement, it is best practice not to rescind your offer. This is the case regardless of whether the employee verbally accepted or did so in writing.
Following acceptance, the Courts will consider that the employee/employer relationship has started. Even in cases where the employee has not officially started working, the employment relationship is considered to have begun. In the event you no longer wish to have the prospective employee start work for your business, you must follow the proper termination procedure.
It can often be a difficult process to dismiss an employee, especially when they are yet to start working for your business. There are limited circumstances where you can rescind a job offer, such as where your offer was conditional on certain elements, and your candidate failed to satisfy these. For example, employment might be conditional on a clean criminal history, clean drug test or sound reference checks. If you fail to follow a correct procedure, you open your business to receiving a personal grievance claim.