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Withdrawal of job offer costs employer £3000

The Employment Tribunal in the case of McCann v Snozone has awarded a Claimant one month’s salary for breach of contract after a verbal offer of employment was retracted.

Background

Snozone engaged a recruitment agency to find suitable candidates for current vacancies at its organisation. Mr McCann attended two interviews and subsequently received a call from the recruitment agency during which he was verbally offered a job with Snozone. It was accepted that details such as salary and start date were not discussed during the call.

Snozone later denied that an offer of employment was made and Mr McCann subsequently brought a claim in the Employment Tribunal for breach of contract.

The law

A legally binding contract can be made verbally and does not need to be made in writing (except in certain circumstances). The key elements of an enforceable contract are:

  • Offer
  • Acceptance
  • Consideration
  • Intention to create legal relations
  • Certainty of terms

Decision

The Employment Tribunal held that a contract of employment had been formed as Snozone, acting through the recruitment agency, had verbally offered Mr McCann employment and he had accepted the offer. The Tribunal found that the parties had created legal relations and as such, the contract of employment could only be terminated by giving notice.

As Snozone had withdrawn the offer without giving notice to terminate, the Claimant was entitled to damages for breach of contract.

Although there were no key employment terms discussed (i.e. salary) when the offer was made, a contract can still be formed if the offer is accepted by a job applicant. In the absence of some of the contract terms being agreed, a tribunal can fill in the gaps based on a standard of reasonableness. In this case the Tribunal decided that a minimum reasonable contractual notice period was one month and awarded the Claimant damages for breach of contract equivalent to one month’s salary and tribunal fees totalling £3,000.

Summary

This case should act as a warning to employers who change their minds after offering employment as they may still be liable for a breach. Ideally, offers of employment should always be made in writing rather than verbally. As it is often the case that offers will be made over the phone, employers should always say that the offer of employment is expressed to be conditional and terms will be set out in writing. An offer of employment should set out:

  • the job title and the offer of that job;
  • the start date and any probationary period;
  • any conditions that apply to the offer (the employer can withdraw the offer without breaching the contract if the conditions are not satisfied);
  • the terms of the offer (salary, hours, place of work, holiday entitlement etc.); and
  • how the offer can be accepted.

If you would like to speak to us about contracts of employment, please feel free to email us  or contact us on 0191 282 2880 for a no obligation chat.

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