Do you need to give notice to someone you have made an offer of employment to?

Breach of contract for not giving reasonable notice on withdrawal of job offer

It is good practice for an employer to expressly state that a job offer is conditional upon receipt of satisfactory references and right to work checks.  It means that if these conditions are not met to the employer’s satisfaction, the employer has the right to withdraw the offer without incurring liability for breach of contract.

However, what is the legal position if the employer withdraws the offer for other reasons?  Is the employer in breach of contract or is there actually any contract in existence?   If a contract does exist, what is the employer’s liability?   These questions and more were considered in the recent Employment Appeal Tribunal case of Kankanalapalli v Loeshe Energy Systems Ltd . 

What was the case about?

Mr Kankanalapalli was offered a job as a project manager by Loeshe Energy Systems Ltd (the ‘Employer’) on 23 September 2022.    He was sent an offer letter which proposed a start date of 1 November 2022.  The offer letter expressly stated that the position was subject to the receipt of satisfactory references, a right to work check and a 6-month probationary period.   Crucially, the offer letter did not state what notice period would be required to terminate the employment contract.   

After sending the offer letter, there was some to-ing and fro-ing between Mr Kankanalapalli and the Employer over relocation costs and other matters, following which the Employer agreed to pay £3000 in relocation expenses.   On 26 September 2022, Mr Kankanalapalli emailed the Employer to say that he accepted the offer of the role. 

Mr Kankanalapalli subsequently completed the reference form with his referee contact details and sent this back to the Employer.  The Employer confirmed receipt of the forms on 6 October 2022 and also reminded Mr Kantanalapalli to email his right to work documents, adding that they would need to see the original documents on his first day at work.   Mr Kantanalapalli emailed the right to work documents straight away. 

A day later, on 7 October 2022, the Employer emailed Mr Kantanalapalli to say that due to a delay in obtaining a “notice to proceed” (an authorisation, usually from a customer, for work to commence on a project) he would not be required to start work until 3 January 2023 – two months later than the original proposed start date.    Mr Kantanalapalli replied to say that he had already booked flights for him and his wife to the UK to start the new job and asked what he would be paid for November and December when he was not working.   The Employer replied on 11 October 2022, to say that it could no longer offer the contract for the position of project manager to start on 1 November 2022.   Instead, it said that it could make a conditional job offer based on the “notice to proceed” – in other words, that the new job offer would be conditional on the Employer receiving authorisation that work under the project could start.  

Breach of contract claim

Mr Kantanalapalli subsequently presented a claim for breach of contract in the Employment Tribunal against the Employer.   He claimed that the job offer was withdrawn without appropriate notice and this was a breach of contract.    

The Employer denied the claim.  Its main argument was that the contract was conditional on the receipt of satisfactory references and right to work checks and that as these conditions had not been met by the date the offer was withdrawn, a contract had not come into existence and therefore it was not in breach of contract.  

The Employer also tried to argue, in the alternative, that Mr Kantanalapalli had not accepted the offer because he hadn’t signed and returned the offer letter, but this argument was rejected by the Employment Tribunal who said that Mr Kantanalapalli email of 26 September 2022 constituted acceptance.

In relation to the question of whether the Employer was in breach of contract for withdrawing the job offer, however, the Employment Tribunal agreed with the Employer.   It found that the offer of employment was indeed subject to the two conditions that were set out in the Employer’s offer letter.  As neither of these had been completed by the time the Employer withdrew the offer, two weeks later, the Employment Tribunal concluded that there was no binding contract between the parties and therefore Mr Kantanalapalli’s breach of contract claim failed.

The Employment Tribunal went on to say that even if it had found there was a binding contract, because Mr Kantanalapalli had less than one month’s service, the Employer would not be required to give any notice.   This conclusion appears to have been based on the statutory minimum periods of notice which require that employers must give one weeks’ notice once an employee has one month’s employment. 

The Employment Appeal Tribunal’s Decision

Mr Kantanalapalli appealed to the Employment Appeal Tribunal where he was successful in arguing that the Employer was, indeed, in breach of contract for failing to provide a reasonable notice period of three months. 

The Employment Appeal Tribunal upheld nearly all of Mr Kantanalapalli’s grounds of appeal.

First, the Employment Appeal Tribunal agreed that the original Tribunal should have considered whether the conditions that the offer was subject to (the receipt of the satisfactory reference and right to work checks) were conditions that had to be met first in order for a contract to come into existence (‘conditions precedent’) or whether they were conditions that applied after a contract had come into existence (‘conditions subsequent’).   The Employment Tribunal did not do this, and this was an error.

Secondly the Employment Appeal Tribunal held that even though the Tribunal was entitled to find that the conditions had not been met by the date the Employer withdrew the offer,  it should have considered (but failed to) the question of whether the Employer was under an implied contractual obligation not to withdraw the offer before the date by which the conditions had to be fulfilled, namely, by the start date of 1 November 2022.

Lastly, the Employment Appeal Tribunal said the original Tribunal was wrong to conclude that, if there was a contract in existence, the notice period would have been zero.  The Employment Appeal Tribunal referred to established case law which says that, where no notice period is stipulated or discussed, it will be necessary to imply a term of reasonable notice into the contract – where what is deemed reasonable will depend on all the circumstances, including the nature of the work and seniority of the role.  A notice period of zero weeks was not, in the Employment Appeal Tribunal’s opinion, reasonable.    The Employment Appeal Tribunal also said that it did not matter what the Employer’s template contract said about notice or what its usual practice was – what constituted a reasonable period of notice had to be assessed by considering all the circumstances, including what the parties’ intentions were at the time the contract was made. 

In an unusual step, it was agreed that the Employment Appeal Tribunal would decide the case rather than reverting the case back to the original Tribunal.    

The Employment Appeal Tribunal went on to decide that, based on the facts and circumstances of the particular case, a contract came into existence between Mr Kantanalapalli and the Employer before the job offer was withdrawn.   Therefore, the conditions that had to be met (the satisfactory job reference and right to work checks) were “conditions subsequent” and not “conditions precedent”.  In other words, they were not conditions that had to be fulfilled before a contract could come into existence, but they were conditions that gave the Employer grounds to terminate the employment contract already in existence if they were not met   

The Employment Appeal Tribunal also decided that three months was a reasonable period of notice to terminate the contract, taking into account all the circumstances, including the seniority of the role.   Accordingly, by not providing Mr Kantanalapalli with reasonable notice, the Employer was held to be in breach of contract and was ordered to pay him three months’ notice.  

Points to note and action to take

There are a number of key take aways from this case.

The key one is that, to minimise the risk of liability for breach of contract, employers should set out in the offer letter what notice period will be required to terminate the employment contract before the employment start date.     

By expressly stating what the notice period is, there should be no requirement to imply a reasonable notice period.   Therefore, even if a contract comes into existence before the usual conditions are met or before the prospective employee starts work, the contract can be terminated by the Employer giving the notice period set out in the offer letter.    

The case also reinforces how important it is for employers to provide a written offer of employment that clearly sets out the conditions that the offer is subject to.   This includes stipulating that the offer is conditional on receiving references that are satisfactory to the employer, proof of right to work as well as any other conditions that need to be met, such as proof of qualifications or skills necessary to be able to do the role.   

The case highlights the need to exercise caution before stipulating start dates in the offer letter, particularly if the job or the start date is dependent on a “notice to proceed” being given by a customer or contractor or other matters outside the Employer’s control.   It would be sensible for employers in this situation to make the offer conditional on a “notice to proceed”, as the employer in this case belatedly did – unfortunately after a contract had already formed.  

Finally, it is important to note that discussions that take place between an employer and prospective employer after an offer is sent can sometimes, inadvertently, lead to the creation of a contract of employment.  In the case in hand, the discussion of paying relocation expenses and advising the employee to take on a 12-month property rental, were key factors in the Employment Appeal Tribunal’s finding that a contract was already properly formulated by the time the job offer was withdrawn.  It therefore pays to be cautious what you discuss and agree in post-offer communications.  It also further underlines the importance of stipulating a notice period in the offer letter.

If you would like advice on, or assistance in preparing offer letters or with any aspect of your recruitment process, please contact us.  

You can read the full case judgment here: Kankanalapalli v Loeshe Energy Systems Ltd 2026 EAT49