In Kankanalapalli v Loesche Energy Systems Ltd, the claimant was offered a project manager role in September 2022, with a proposed start date of 1 November 2022. The written offer stated that employment was “subject to” receipt of satisfactory references, a right to work check, and successful completion of a six‑month probation period. No notice provisions were included in the offer.

The claimant accepted the offer, completed pre‑employment paperwork, provided referee details, and supplied right-to-work documents electronically. The employer acknowledged his acceptance and made practical preparations for his start, including discussing relocation arrangements.

Shortly before the intended start date, the employer notified the claimant that the underlying project had been delayed and subsequently withdrew the job offer altogether. The claimant brought an Employment Tribunal (“ET”) claim for breach of contract, arguing that the employer had terminated a binding employment contract without notice.

The key questions for the ET were:

  • whether the conditions in the offer (i.e the right to work checks, satisfactory references and completion of probationary period) were conditions precedent (meaning no contract existed unless and until they were satisfied), or conditions subsequent (meaning a contract existed when the claimant accepted the offer, but it could be terminated if the conditions were not met); and
  • if a contract existed and was silent on notice, whether a term requiring reasonable notice should be implied, and what period of notice was reasonable.

The ET concluded that the offer was subject to unsatisfied conditions relating to references and right to work checks, and that these prevented a binding contract from coming into existence (i.e. they were conditions precedents). Whilst the claimant had provided his referee details, the references had not been received. In addition, whilst the claimant had provided electronic documents for right to work checks, the originals were required to be provided before the claimant started work. On that basis, the breach of contract claim failed.

Alternatively, the ET held that even if a contract had been formed, there was an implied term allowing termination with no notice based on the employer’s standard terms of employment (which were not provided to the claimant). The claimant appealed.

The EAT allowed the appeal and substituted its own decision.

Firstly, the EAT held that the ET had erred by assuming the conditions were precedent without analysing their true contractual nature. The offer letter contained the key contractual terms and on a proper construction of the offer and subsequent correspondence, the EAT concluded that the conditions were conditions subsequent. The contract came into existence when the claimant accepted the offer, but the employer retained the right to terminate if the conditions were not ultimately met. The employer was in breach of contract by terminating the contract without notice.

Secondly, the EAT found that the ET had taken the wrong approach to implied notice. The assessment of reasonable notice had to be made at the point the contract was entered into, not with hindsight and not by reference to internal standard terms of employment that were never shared with the claimant. Whilst Section 86 of the Employment Rights Act 1996 sets minimum notice periods and provides no minimum notice period where the employee has less than one month’s service, s.86 ERA 1996 does not displace the common law requirement to give reasonable notice where a contract is silent.

Taking into account the seniority of the role, the lengthy recruitment process, the international element, and the expectation that the claimant would relocate, the EAT concluded that reasonable notice was three months. The employer was therefore in breach of contract by withdrawing the offer without notice and was ordered to pay the claimant three months’ notice pay.

This decision is a reminder for employers of the legal risks that can arise when withdrawing a job offer. The case highlights that “conditional” job offers may still give rise to a binding contract. It underlines the importance of understanding whether pre‑employment conditions are genuinely preventing a contract from existing. Employers should review their offer letters and decide whether it is their intention that no binding contract arises until all conditions have been satisfied. If so, wording should be inserted to that effect. Alternatively, if a binding contract is to arise on acceptance of the offer, then any notice period that will apply to the employment should be set out in the offer letter.