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:
- Adverse police check or pre-employment medical;
- Candidate’s inability to obtain a Working With Children
Clearance (WWCC);
- The parties cannot agree on terms – negotiations have been
ongoing and have stalled; and
- 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
- 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.
- 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?”
- 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.
- 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