Today’s recruitment market is fast-paced and more competitive than ever. When a business finds the perfect candidate for a vacant position, they often want to formalise an offer as quickly as possible. In many cases, they will use an offer of employment to immediately establish an agreement to hire a new employee.
An employment offer is a brief way to convey essential information about a role to a candidate, helping them decide whether to formally accept a job.
Crucially, an employment agreement covers the three important legal elements – offer, consideration and acceptance.
It is best practice for a letter of offer to be conditional upon the employee signing and returning an individual employment agreement within a specified period. In this case, only if the candidate signs and returns the employment agreement within the required time will the employment relationship come into effect.
However, if the offer is unconditional, once it is signed by the candidate and returned to the employer, the offer letter becomes contractually binding.
What Information Should an Offer of Employment Include?
An offer of employment letter should include all the information a candidate needs to either accept or decline a job offer. While it will not be as detailed as an employment agreement, it will likely include:
- Position title
- Agreed salary
- Other benefits
- Start date
- Full-time or part-time
- Expected hours
- Trial period provisions should be pointed out
- Any conditions of the offer – e.g. the offer is conditional upon a clear criminal convictions check.
The letter should also specify a deadline for the candidate to respond to the offer of employment. As mentioned, it is advisable that the offer is conditional upon the employee accepting and signing the contract of employment within a certain time. Finally, it is important to note within the offer that once the employment agreement has been signed, the candidate’s status as a new employee is official.
How is an Offer of Employment Sent?
It is common for an offer of employment to be sent as an attachment in an email. You might have a conversation with the candidate to negotiate the terms of a role. However, once the negotiation is complete and an offer of employment is made during a telephone call or face-to-face conversation, this offer becomes legally binding but may not be easy for the employee to prove if this is disputed.
You should always make formal offers of employment in writing and keep a signed copy of the letter and employment agreement in the new employee’s documentation.
What are the Next Steps for Employers?
Most importantly, be prepared to answer any questions the candidate might have after the offer has been sent. The candidate may need clarity on some terms to make an informed decision. If you are slow to respond to any enquiries, this could sway them into declining the offer.
What is the Difference Between an Offer of Employment and an Employment Agreement?
While an offer of employment will normally be short and congratulatory in tone, an employment agreement will be formal and carefully worded.
An employment agreement is usually several pages long, containing clauses covering everything from compensation to notice periods. Typically, the agreement will be sent with the offer of employment and candidates are asked to sign both to indicate acceptance of a role.
Can an Offer of Employment Substitute an Employment Agreement?
An offer of employment should never substitute an employment agreement. Having an employment agreement in place is essential because:
- It clarifies all the terms and conditions for both the employee and employer
- It allows either party to refer to the relevant clause in the agreement if any disputes arise
- It avoids disputes arising in the first place, since both parties are fully aware of their rights and obligations
As well as being a legal requirement, employment agreements are also essential in laying the foundations for the long-term relationship between an employer and employee.
If the new employee is a member of a union, they will be covered by any relevant collective employment agreements.
Can an Employer Retract an Offer of Employment?
An employer can retract an offer of employment if the candidate has not:
- signed and returned an unconditional letter of offer
- signed and returned an individual employment agreement where this is a condition of the offer
- complied with any other conditions of the offer.
However, if the candidate has formally accepted the offer or where applicable, has complied with the conditions of the offer and the employer chooses to retract it, the business leaves itself open to the possibility of a personal grievance claim.
Hiring and onboarding a new employee is a complicated process that’s surrounded by complex legislation. For any questions related to employee contracts, contact Peninsula’s FREE Initial Advice Line on 0800 234 036.
This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.
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