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Withdrawal of job offer was a breach of contract

Makbool Javaid

In McCann v Snozone Ltd an employment agency was appointed by Snozone Ltd to find suitable candidates to fill two maintenance engineer vacancies. McCann (M) was interviewed twice – once by the General Manager, together with an engineering consultant, and then by the Operations Manager.

The tribunal found that M subsequently received two phone calls from the agency the content of which were the crux of the claim. During the first phone call, M was told that Snozone wished to offer him the job, but that it would be in the middle of the advertised salary band of £28,000 to £30,000. M accepted that offer as put to him. The second phone call confirmed that Snozone were pleased that M had accepted their offer.

The agency contacted M to say that a written contract would be with him by the end of the week. When no documents arrived M contacted the agency. However, during that ‘waiting’ period the agency had become aware that Snozone had decided not to employ M because the engineering consultant felt that he could not work with M on a professional level and his level of skill would not enable him to acquire the new skills required to work on the new equipment. The agency rang M and told him he was not being made an offer of employment. When M contacted Snozone, their reply indicated that no verbal or written offer of employment had been made.

The employment tribunal upheld M’s claim for breach of contract. A contract is made by offer and acceptance on the basis of ‘consideration’ (something of value being gained by each party). Once the offer has been accepted, then the legal relationship created can only be terminated by giving notice in accordance with the contract. If no contractual notice is agreed, then it is a question of what is reasonable.

On the basis of the two initial phone calls which were at the crux of the claim, the tribunal was satisfied that M was offered a job and had accepted it. A contract had been made. As the job offer had not been honoured, there had been a breach of contract. The tribunal determined that a reasonable period of notice would have been one month. The damages would therefore be one month’s salary at the midpoint annual salary for the job – £32,500 – which amounted to £2,708.34. In addition, M would receive his tribunal fees of £390, making the total amount of damages as £3,098.34.

The case serves as a reminder of basic contract law. A contract can be made verbally or in writing on the basis of an offer, consideration, acceptance and an intention to be legally binding. Once the contract is made, then it can only be terminated in accordance with its terms.

The case also highlights the dangers inherent in the recruitment process of making verbal offers. There is often the temptation, having found what is thought to be the right person, to make a verbal offer on the spot or shortly afterwards, without setting out all the terms. But if the essential ingredients of a contract exist, then that contract can be breached, where it is reneged upon, even though the person has not started work.

Content Note

The aim is to provide summary information and comment on the subject areas covered. In particular, where employment tribunal and appellate court cases are reported, the information does not set out full details of all the facts, the legal arguments presented by the parties and the judgments made in every aspect of the case. Click on the links provided to access full details. If no link is provided contact us for further information. Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, SM&B cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.

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