Withdrawal of verbal job offer created a breach of contract

A firm has been ordered to compensate a potential employee after withdrawing a verbal job offer made over the phone.

The Employment Tribunal said the withdrawal amounted to breach of contract even though there was no written agreement.

The case involved a company that appointed an agency to find suitable candidates for a vacancy. One applicant was interviewed twice for the position, once by the general manager and an engineering consultant, and then by the operations manager.

The applicant was then offered the job in a phone call from the agency. There was also a second phone call confirming the level of salary. He was told there would be a written contract sent to him by the end of the week.

However, no documents were sent because the company had second thoughts. It decided not to proceed with the offer because the engineering consultant had reservations about the applicant’s suitability.

The Employment Tribunal held that the two phone calls, in which the job offer was made and accepted, created a legally binding contract that could only be terminated by giving notice in accordance with the contract.

No notice period had been agreed verbally so the tribunal ruled that one month would be a reasonable period when assessing compensation.

It therefore ordered that the company pay the applicant the equivalent of one month’s salary for the job, £2,708, and pay his tribunal fees.

Please contact Robert Bedford if you would like more information about the issues raised in this article or any aspect of employment law.