Withdrawing Job Offers: Legal Considerations.

Our firm recently gave a successful candidate an offer of employment. One week later however, our background checks revealed that he was dismissed from his previous employment on suspicion of being involved in fraudulent activity. He did not disclose this information during his interview. We now want to withdraw the offer letter and would like to know of any legal consideration.

Question. Dear Koki,

Our firm recently gave a successful candidate an offer of employment. One week later however, our background checks revealed that he was dismissed from his previous employment on suspicion of being involved in fraudulent activity. He did not disclose this information during his interview. We now want to withdraw the offer letter and would like to know of any legal consideration.

Answer. 

First of all, you need to determine whether there exists a valid employment contract. Was the offer accepted by the candidate? If yes, then there exists a legally enforceable employment contract (assuming all other conditions of a valid contract were met).

Generally speaking, before acceptance, you can withdraw/revoke an offer of employment without legal risk from your prospective employee. You need to communicate to him/her by sending a written ‘withdrawal/revocation notice’.

If an offer is accepted (either through communicated acceptance or performance), an employment contract with rights and obligations by parties is entered into (regardless of whether or not the employee has reported to duty) and can only be extinguished by termination.

Other than termination in accordance with an employment contract, parties can rescind voidable employment contacts on the grounds of; Misrepresentation (whether fraudulent, negligent or innocent), non-disclosure of material facts or undue influence.

Under Kenyan Employment Law, an employer risks losing claims of unfair termination, even where a right to rescind exists, for failing to follow the lawful/fair disciplinary and termination process.

Our courts have held severally that, that unlike ordinary commercial contracts, employment contracts apply different standards since they touch on the livelihood of an individual and hence should be terminated in accordance with the Employment Act and all other relevant laws as well as organisational policies and employment contact or collective bargaining agreements.

In your case, if your offer has not yet been accepted, write to the candidate communicating your withdrawal of the offer. If, however, the offer has already been accepted, then you can only terminate the contract by rescission if you can demonstrate; misrepresentation (whether fraudulent, negligent or innocent), non-disclosure of material facts or undue influence. You can also terminate on the ground of misconduct if you have a valid reason to do so.

Either way, and to be on the safe side, carry out proper investigations (to justify your reasons) and give the employee a fair opportunity to be heard in compliance the the Employment Act, company policies and employment contract before terminating an employment contract.

P.s Consider each matter in context and seek legal advice in order to reduce risk of legal exposure.