What can you do where new hire accepts your offer but you or they pull out later?

Is there a binding legal agreement?

Once you have made an offer of employment (usually in writing in the form of an offer letter) and that has been accepted by the new hire there will usually be a binding legal agreement between you even though the job is yet to start, no work has yet been done and you have yet to pay any money .


If either party wants to pull out contractual notice will usually be required.  If contractual notice is given and that notice runs out before the employment is due to start there can be no claim by either party because there is no breach of contract.

What happens when notice is given but it will expire after start date?

Employee giving notice…

If the employee refuses to start work on the commencement date where notice has still to run, they will be in breach of contract.  You can sue the employee for breach of contract for any loss you can prove you suffered as a result from the start date to the date when notice would have expired.  You may not have any easily quantifiable loss.  The more senior or specialist the hire and the longer the period of notice still to run from the start date, the more likely that you may suffer substantial quantifiable loss.

You giving notice…..

If you decide to pull the employment after the employee has accepted your offer (unless there is some referencing issue) and you refuse to let the employee start work on the start date – where notice is still to run – you will be in breach of contract.

The loss suffered by the employee will be easily quantifiable, being the salary and contractual incentives due (although these may be harder to prove/claim) that would have been payable during the balance of the notice.  If you have a contractual PILON power reserved in an employment contract you could exercise this thereby terminating the employment by making payment of the balance of the notice due after the start date (if your contract is well drafted salary only).  The only possible other claim by the employee would be if discrimination or blacklisting were a provable factor in the termination.

This article/blog is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.

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