Employer Hiring & Recruitment Questions
Can an employer rescind a job offer once it has been accepted?
Whichever way you look at it, revoking a job offer is a messy business. While some employers think they can simply withdraw job offers for whatever reason, rescission is not as pain-free as it may seem.
If the offer is not accepted, usually the employer will be able to withdraw the offer. But this is subject to the terms of the contract. In some circumstances the terms do not allow the employer to unilaterally withdraw it.
There are certainly risks at any stage. If you revoke the offer before it's accepted, the candidate may have relied on it and resigned from their current place of employment. As a result, you could face potential claims for misleading or deceptive conduct.
Be careful. Withdrawing an offer can raise a myriad of legal issues. Employers may be sued for compensation for misrepresentation or unlawful discrimination even if the candidate has not accepted the offer.
There are often business reasons that may result in a job offer being withdrawn. Employers may have a change of heart when they become aware of issues about the job seeker after they've made the offer. For example, reference, medical or criminal record checks may reveal prior criminal convictions or problematic medical conditions. It may also be the reasons behind the way the applicant conducts negotiations over the offer.
In other instances, employers may have better candidates turning up or they may no longer have a role to fill if the job itself no longer exists due to funding, budgeting issues or changes in the organizational structures which impacts the role itself.
From the employee's perspective they've received an offer, they've accepted it and then they've relied on that offer to their detriment by resigning from their current employer. So they might find themselves unemployed in a situation brought about by the new employer's representations, which may be breach of contract. There's definitely a risk of a construction candidate filing suit.
The extent of possible damages would depend on all the circumstances, including the terms of the contract and what damages the prospective employee suffers. Generally, the new employer has the right to terminate the employment on notice and the employee does not necessarily have any rights beyond what is in the contract.
However, in some cases, the employee might have a wider claim. Terminating someone early could have a significant impact on the person's other employment prospects, which they may be able to work into a claim. If the person hasn't been able to work for a year, it could have serious repercussions on other things, such as their mortgage. In some cases, the employee might be able to sue for damage to their reputation.
As well as legal wrangling and financial losses, revoking an offer could also harm your company's image and credibility in the market place.