Considering withdrawing a job offer?

The recent case of Kankanalapalli v Loesche Energy Systems Ltd [2026] is a useful reminder for employers about the risks of withdrawing job offers, particularly where the offer has already been accepted and the individual has started preparing for the role. It also highlights the importance of fully understanding whether conditions attached to an offer prevent a contract from forming, or simply allow it to be terminated later.

In this case, the Claimant, Mr Kankanalapalli, applied for a project manager position with Loesche Energy Systems Ltd. He was offered the role in September 2022, subject to satisfactory references, a right to work check, and a six-month probationary period. The proposed start date was 1 November 2022 and, given the nature of the role, he was required to relocate.

Mr Kankanalapalli accepted the offer shortly after it was made and began the onboarding process. He provided personal details, right to work documentation, and referee information, although he did not return a signed copy of the offer letter. Before his start date, however, the employer withdrew the job offer due to delays in the relevant project.

Mr Kankanalapalli brought a claim in the Employment Tribunal for breach of contract, arguing that a binding agreement had already been formed and that he was entitled to notice.

The Employment Tribunal agreed that the offer had been validly accepted, despite not being returned in the requested format. However, it concluded that no binding contract existed. This was because the requirements for satisfactory references and a right to work check were conditions that had to be fulfilled before any contract could come into existence. As those steps had not been completed, the Tribunal held that the job offer remained conditional and could therefore be withdrawn without consequence.

The Tribunal also found that even if a contract had been formed, no notice would have been required given the Claimant’s short period of service.

Mr Kankanalapalli appealed. The Employment Appeal Tribunal (EAT) allowed the appeal and disagreed with the approach taken by the Employment Tribunal. The key issue was whether the conditions attached to the offer were ‘conditions precedent’ (preventing a contract from forming) or ‘conditions subsequent’ (allowing termination if not satisfied).

The EAT’s view was that these were ‘conditions subsequent’. The offer letter contained all of the key contractual terms, and the parties had clearly moved beyond the point of mere negotiation. The Claimant had accepted the role and had begun preparing for employment and the employer had taken steps consistent with that, including progressing onboarding arrangements.

The wording used by the employer also suggested that employment could be terminated if satisfactory references were not received, rather than that no contract existed until that point. Importantly, the offer was not withdrawn because the conditions had not been satisfied, but because of project delays.

The EAT concluded that a binding contract had been formed. In relation to notice, there was no express agreement between the parties at the time the contract was formed. In those circumstances, a term of reasonable notice had to be implied. The Tribunal should have considered what had actually been agreed between the parties rather than relying on standard contractual terms produced during litigation.

Considering the seniority of the role, the length of the recruitment process, and the fact that Mr Kankanalapalli was required to relocate (including suggestions that he secure longer-term accommodation), the EAT decided that a three-month notice period was reasonable.  The appeal was therefore allowed, and Mr Kankanalapalli was awarded three months’ notice pay.

Practical points for employers

This case raises some important practical points for employer:

• Labelling an offer as “conditional” does not necessarily mean that no contract exists. The distinction between ‘conditions precedent’ and ‘conditions subsequent’ will depend on the wording used and, importantly, the conduct of the parties.
• Employers should also ensure that notice provisions are clearly set out at the offer stage. If they are not, a tribunal may imply a period of reasonable notice, which could be significantly longer than anticipated.
• This decision serves as a warning that withdrawing an accepted offer, particularly close to the start date, can expose employers to liability even where onboarding is not yet complete.

Employers who are considering making a job offer should make sure they are confident that the way in which the offer is worded will not cause them problems further down the line.  If you are in any doubt, seeking advice at the outset is likely to be much more cost-effective and stress-free than the process experienced by the team at Loesche Energy Systems Ltd in this case.

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This article aims to supply general information, but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek advice specific to your own circumstances. Fraser Dawbarns LLP is always happy to provide such advice.