Contracts of Employment

So, you’ve gone through a lengthy recruitment process and you’ve found the ideal candidate but before making them a job offer, it’s a good idea to know exactly when a contract of employment becomes legally binding.

A contract is not only formed when you sign on the dotted line, it can also become legally binding when accepted in verbal format.

In the case of McCann vs Snozone Ltd 2016, the employer was ordered to pay the candidate 1 months’ salary as they had made a verbal offer of employment to McCann, which McCann in turn accepted. Snozone Ltd subsequently withdrew the offer of employment, McCann had argued at the following employment tribunal that the contract of employment had been breached as the employer had not given McCann notice to terminate the contract.

What lessons can we learn here?

A contract is formed when the offer of employment is made, and the offer has been accepted, regardless of whether the offer of employment is verbal or in writing, an accepted offer forms a contract between two parties, and can become breached if either party does not fulfil the obligations of that contract.

An offer of employment should always be in writing, setting out the key terms of the offer, such as the job role, the salary, the probationary period and the notice period (especially if this is reduced in the probationary period).

If you do find you need to withdraw the offer of employment you should pay the minimum notice period applicable, this is why you should set it out in the offer letter, otherwise you may find you need to pay one months’ notice to the candidate, even if they never actually commence working for you.

There are some circumstances where you can withdraw the offer of employment, again the reasons should be listed in the offer letter, and can include two references being obtained which the employer deems as satisfactory and evidence of the individual’s rights to work in the UK, if these requirements are not met by the candidate then the offer can be withdrawn without breaching the contract of employment.

If you have any concerns with offering candidates a contract of employment or choosing when it is the right time to offer someone a position, please contact one of our consultants who will be pleased to help.

PicassoHR Ltd, HR Outsourcing Consultancy, SuffolkReferences: