Can an employer withdraw an employment offer that has been accepted, for example if there is a subsequent recruitment freeze?

Where there has been an unconditional offer and the employee has accepted the offer there is a binding contract of employment, even if the employee has not yet started their first day of work. If the employer were to withdraw the offer once it had been made and accepted, this would be a breach of contract. The employer would then be liable for the consequences of that breach, for example notice pay (subject to any duty to mitigate loss on the part of the individual).

Where an employer makes a conditional offer of employment, it should make clear that it retains the right to withdraw the offer and that no contract is formed until the conditions, for example the receipt of satisfactory references, are satisfied (see Conditions precedent and subsequent in the Employment law guide). Depending on the wording of the offer, the employer should be able to withdraw the conditional offer if there is a subsequent recruitment freeze, for example. 

The employer should ensure that there is no discrimination behind the reason for wishing to withdraw an offer. If the reason is a freeze on recruitment, the employer risks a breach of contract claim; but if, for example, the withdrawal takes place after the employer has found out that the employee is pregnant or disabled, there is also a high risk of a discrimination claim. If the reason is pregnancy the employer may also face a claim for automatically unfair dismissal as no qualifying period of service will be required.