The HMRC set up IR35 some years ago as a way to determine if a worker is a ‘disguised’ employee. In other words, whether they are being paid ‘off-payroll’ through an intermediary rather than being an employee of the organisation. The intermediary could be the contractor’s own limited company, through which both the organisation and the worker gain – the organisation has no need to pay NI contributions or employee benefits, and the worker can take advantage of tax efficiencies through the limited company.
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What’s the Safest Way to Withdraw a Job Offer?
I have been asked a lot of questions recently about withdrawing job offers based on poor references, so I thought that I would write about it in more detail here.
Can you withdraw a job offer once it has been made? What risks do you face as an employer if you change your recruitment plans?
Sometimes you will need to withdraw an offer of a job. The hiring situation may change because of a general recruitment freeze, a restructure within your organisation or a change of management. The funding for the post might have been withdrawn or you may become aware that the selected candidate is not suitable after all.
Job offers can be withdrawn after they are made, but there are risks associated with doing this. Withdrawing an offer because circumstances have changed looks like bad planning and could affect your company’s reputation. The employee may be able to bring a tribunal claim for breach of contract.
When is the contract of employment formed?
An employment contract is formed once an unconditional job offer is made and accepted. If you withdraw an unconditional job offer once it has been accepted, you are effectively terminating the contract and could be liable for damages for the individual’s loss.
Even though the individual has not started working for you, there will be a notice period due – just as with other terminations. Damages could amount to what the individual would have received if you had given proper notice – including any pay and benefits due.
What if your recruitment plans change?
If your recruitment plans change due to business needs and you have to withdraw job offers, you should notify the recruits as soon as possible to try to limit the damage and enable them to mitigate their potential loss. The selected candidate might not have resigned from their current employer yet. If they have, they may still be able to ask for their old job back – the sooner this is done the better.
Pre-recruitment checks and job offers
Most job offers are conditional on the new recruit satisfying certain conditions. The selected candidate may need to provide references or evidence of qualifications, or they may need to demonstrate their right to work in the UK. If the individual does not satisfy one or all of those requirements, you can withdraw the job offer without being liable for damages.
If you don’t make it clear that the job offer is conditional, and then withdraw the offer because the recruit has not satisfied one of your requirements, this will amount to a breach of contract and you may be liable for damages. Offers of employment should make absolutely clear that they are conditional on certain requirements being met. Failure to do so can be costly.
If you’re considering making or withdrawing a job offer and you want to make sure that you’re doing it properly, contact us first for some advice. Call us on 0118 940 3032 or email sueferguson@optionshr.co.uk.
Zero Hours Update – the Latest Developments
A zero-hour contract is the name given to a type of contract, where an employer has the discretion to vary employee’s working hours, usually anywhere from full-time to “zero hours”. The employer typically asserts that they have no obligation to provide work for the employee.
There have been a number of changes made to the rules governing these contracts in recent months and the Department of Business, Innovation and Skills (BIS) has published some guidelines for employers, suggesting the following:
- Zero hour contracts are only appropriate in situations where an employee is engaged in seasonal work or a one-off event
- When recruiting, you should clearly advertise the job as a zero hour contract and inform any applicant that hours are not guaranteed
- You should include within the contract whether you deem the individual an ‘employee’ or a ‘worker’, what rights they are entitled to, how work will be offered to them, and how the contract can be terminated
- As an employer you should give as much notice as possible when you can’t offer work
- This is addition to the fact that exclusivity clauses have been prohibited since May 2015. There is more about this in a previous blog here.
In addition to this guidance, the BIS’s Exclusivity Terms in Zero Hour Contracts (Redress) Regulations 2015 give more protection for employees on zero hours contracts. They will have a right not to be unfairly dismissed if the reason is that they have failed to comply with an exclusivity clause. There is no qualifying period of employment needed to bring such a claim. Zero hour workers have the right not to be subjected to detriment because of non-compliance with an exclusivity clause and if you breach these rights, a worker may issue a claim and seek a declaration or compensation.
What does this mean for you as an employer?
If you use zero hours contracts, then you should do the following:
- Review your employment contracts
- Audit your workforce to see if zero hours contracts are the appropriate contracts to use, in line with the BIS guidance.
- Contact us if you need any help with sorting this out! Call us on 0118 940 3032 or click here to email me.