When “subject To” Isn’t Enough: What Employers Need To Know About Conditional Job Offers

A job offer marked “subject to” satisfactory references, right to work checks and a probationary period might feel like a holding position, something that binds no one until every box has been ticked. It is a reasonable assumption, and one that employers have often relied upon. But as a recent Employment Appeal Tribunal ruling has made clear, that assumption can also be a costly one.

The principle in Kankanalapalli v Loesche Energy Systems Ltd is straightforward but significant. Conditional language in an offer letter does not prevent a contract from forming. Whether a binding agreement exists will depend on the overall picture, such as the terms set out in the offer, the steps taken during onboarding, and the precise wording used across every document the candidate receives. Where that picture suggests a contract is already in place, withdrawing the offer is not simply a matter of changing course. Where a contract has already formed, withdrawing the offer may amount to termination and will ordinarily require reasonable notice.

What happened

The candidate was offered a project manager role in September 2022. The offer was made expressly subject to satisfactory references, a right to work check and a six-month probationary period. He accepted by email, provided referee details and right to work documents, and onboarding steps got underway, including arrangements for a security pass ahead of his start date. He did not return a signed copy of the offer letter.

Less than three weeks after the offer was made, the employer withdrew it, citing project delays. The candidate brought a claim for breach of contract. The employer argued that, because the conditions had never been fulfilled, no contract had ever been formed.

The EAT disagreed. It found that a binding contract had come into existence at the point of acceptance. The conditions were not prerequisites to that contract forming. They were terms within an existing contract that could, if unsatisfied, give grounds for termination. That distinction matters enormously in practice.

Once the EAT had established that a contract existed, the question turned to notice. No notice period had been set out in the offer letter. The tribunal took into account the seniority of the role, the length and structure of the recruitment process, the fact that the candidate had been advised to secure a twelve-month rental in anticipation of relocation, and the significant personal commitment he had made on the basis of the offer. Three months was found to be reasonable. Three months’ notice pay was awarded accordingly.

Why the wording in supporting documents matters

One detail in this case is worth particular attention. The referee consent form sent to the candidate stated that his employment “may be terminated” without satisfactory references. It did not say that no contract would come into existence until references had been received. That distinction, subtle as it may appear, was consistent with a contract already being in place and was part of the evidence that counted against the employer.

This illustrates a risk that is easy to overlook. Employers often focus on the offer letter itself when thinking about contractual risk, but the language used across every document a candidate receives during the pre-start period can be relevant. Inconsistency between documents, or wording that implies a contract is already operating, will be read against the employer if a dispute arises.

What this means for employers

For employers who genuinely intend that no contract should arise until all conditions are fulfilled, that intention must be stated clearly and consistently. If the offer letter uses standard conditional language while a referee form or onboarding document implies employment has already begun, the protection that conditional language was meant to provide may not hold.

Notice provisions deserve equal attention. Leaving a notice period unspecified in an offer letter is common practice, particularly at the stage when the priority is securing a candidate’s acceptance. The Kankanalapalli decision illustrates why this can be expensive. For senior, specialist or project-based roles where candidates may be resigning, relocating or making other significant commitments in reliance on an offer, a tribunal-implied notice period may be considerably longer than the statutory minimum.

The case also has specific resonance for organisations that recruit into roles dependent on funding, project approval or programme continuation. Where circumstances can change before a start date, the possibility of having to withdraw an offer is real. Knowing in advance what obligations that withdrawal might carry is far better than finding out through a claim.

Practical steps

The question every hiring team should be able to answer is this: if this offer had to be withdrawn tomorrow, what would our obligations be? If the answer is unclear, the documentation warrants a closer look.

Offer letters should state plainly whether the conditions attached are prerequisites to any contract forming, or terms within a contract that is already in place. Notice periods should be specified rather than left to implication. Any onboarding steps taken before a start date, from arranging access passes to advising on accommodation, should be considered with an eye to how they would appear if the offer later had to be withdrawn.

None of this requires a wholesale change to how employers recruit. It requires careful, consistent drafting and an understanding that the legal effect of a conditional offer may not be what the language on its face suggests.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.