As an employer, have you ever wondered what might happen if you change your mind about a recruit after your offer of recruitment is accepted but before their employment starts? As explained in this article by Personnel Today, an employment tribunal has now provided an answer. The judge held that the contract had been formed by the verbal offer and acceptance, therefore notice pay was due if either party wished to terminate the contract.
But how much notice pay was due? No start date, salary or notice period had been agreed.
The rough salary had been stated verbally, and the judge determined the likely salary. The judge determined that a reasonable notice period was one month, so the award was one month’s salary.
The judge said that the likely start date did not affect the issues. You could argue with that – the claimant would only have suffered loss during the period he should have been working. It is arguable that the judge should have assessed a likely start date, and only awarded damages for the period from then until the end of the notice period.
Whether or not the judge determined damages correctly, this case illustrates an important lesson for any business. Bear in mind that if the recruit had resigned from another job in order to start this employment, he would have suffered considerably; so out of fairness to the recruit as well as avoiding a negative judgment from the tribunal, it would be wise to make a firm decision before communicating it.
This is not the only expensive mistake that could be made during recruitment. For example, you may employ someone on a fixed term contract but omit a notice clause – in that case, you may have difficultly dismissing them before the end of the agreed period if things don’t work out. Or you may employ someone on a fixed term contract to increase flexibility, but then fail to say anything when the fixed period comes to an end, and the employee ends up becoming a permanent employee. However, the linked article provides a very stark example as to how an easy mistake to avoid could be costly.
If you require further advice on any employment issue, you may wish to join our community; on elXtr we have numerous guides on employment law issues. The linked page, for example, provides a way into getting your employment contracts right, and more strategic advice can be found here.
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