When is it too late? – Revoking (withdrawing) an offer of employment

20 May 2021

In acting for employers, a common enquiry we receive goes something like this:  “Brooke, I thought I found the perfect candidate for this role! Our hiring manager verbally offered the role to them and I sent them the Contract - now I need to revoke it.  How can I do this?”

The first and obvious question to our client is always, why do you want to revoke or withdraw the offer?  The common trend of responses include the following:

  1. Adverse police check or pre-employment medical;
  2. Candidate’s inability to obtain a Working With Children Clearance (WWCC);
  3. The parties cannot agree on terms – negotiations have been ongoing and have stalled; and
  4. Candidate no longer considered “good fit” for the role – finding out information through “the grapevine” of conduct inconsistent with the organisation’s values (i.e. candidate has an addiction to drugs or alcohol or they were fired from their last job for stealing from their employer).

Looking to the scenario outlined above, the following considerations would need to be taken into account For example:

  • What is the reason for revoking the offer? i.e. could the reason be a “prohibited” reason - age, gender, pregnancy, race, sexual preference etc.?
  • What (if any) representations were made by the hiring manager to the candidate when the verbal offer was made i.e. did the hiring manager give the candidate a start date and tell them that they could “go ahead” and give notice to their current employer?
  • Was the verbal offer subject to the Letter of Appointment/Contract being sent out?
  • Are the terms and conditions of the Contract still being negotiated i.e. cannot agree on salary or amount of days per week to be split between working from home and the office?
  • Has the candidate signed and returned the contract?  If the contract has been signed, is it conditional i.e. on satisfactory police check and WWCC?

The key thing to remember in these situations is that it is highly likely that time is of the essence.  Has the candidate already resigned and given notice to their former employer based on the offer made?  Are they intending to move from inner city Melbourne to regional Victoria to accept the role and have already signed a 12-month lease and organised their removalists? 

These sorts of factors can carry significant weight as to whether the candidate has or is likely to have suffered financial loss arising from the revocation and it could have significant bearing on the extent of any legal risks.  These risks could include claims for breach of contract, misleading and deceptive conduct and discrimination.

Accordingly, if your organisation wants to revoke an offer of employment at any given stage, before you “pull the trigger”, it is important to obtain legal advice so that you understand the risks involved and the best way to manage the situation.

4 simple tips and tricks

  1. In an age where people’s lives are largely “on show” through social media, make sure you undertake a “social media” review before any offers are made! It is incredible what people are willing to share on their profiles and it may not align with your organisation’s values. 
  2. Do not forget references!  Ensure you call a candidate’s former employer/s directly (preferably the candidate’s former line manager) or ensure your recruitment agency (if you have used one) has obtained written references and you have thoroughly reviewed them.  All too often we hear that this simple part of the process has been overlooked entirely, or sometimes done after the candidate has already commenced in the role - by which time it may be too late.  We have always found that a great question to ask referees is “Would you employ them again?”
  3. Despite the various legal risks, withdrawing offers at the earlier signs of “red flags” is usually the right option.  If there are red flags early, it is usually a sign of things to come.  Make a considered decision before the candidate steps through the door and undertake a risk assessment
  4. Finally, do not just rely on the probationary period and think that it will be your “saving grace” if the candidate does not work out - This can come with its own set of risks and problems!

This article has been produced for information purposes only and is not legal advice