Employment Law Solicitor Will Trotter explains how this decision highlights the need for careful drafting of offer letters and warns against assuming that “conditional” wording will provide sufficient protection.
Background: a breach of contract?
Kankanalapalli v Loesche Energy Systems Ltd [2026] EAT 49
In September 2022, the Claimant was offered a project manager role with Loesche Energy Systems Ltd (LES), subject to:
- satisfactory references
- a UK right to work check
- successful completion of a six-month probationary period
The offer letter set out key terms, including a contribution to relocation costs, but did not include a notice period.
The Claimant accepted the offer later that month, provided the necessary documentation, and agreed a start date of 1 November 2022.
However, on 11 October 2022 LES withdrew the offer, citing project delays and the fact that the offer had been “conditional”. The Claimant brought a breach of contract claim.
Tribunal decision: when is “conditional” conditional?
The Employment Tribunal dismissed the claim, relying on earlier case law to conclude that no binding contract had been formed.
It found that the conditions (particularly satisfactory references and right to work checks) had not yet been fulfilled, meaning the offer remained conditional and unenforceable.
EAT decision: contract formed on acceptance
The EAT overturned this decision and found in favour of the Claimant.
It held that:
- A binding contract was formed when the offer was accepted
- The references and right to work checks were not conditions preventing the contract from existing, but rather conditions that could affect ongoing employment
In other words, these were conditions subsequent (relevant to continuation), not conditions precedent (required for formation).
Key point: simply labelling an offer as “conditional” does not prevent a contract from arising.
Financial consequences: “reasonable” notice applied
As the offer letter didn’t include a notice period, the EAT had to determine what the Claimant was entitled to recover.
Rather than applying statutory minimum notice or standard company terms, the EAT awarded a “reasonable” notice period of three months, taking into account:
- the seniority of the role
- the length of the recruitment process
- the Claimant’s relocation to the UK
- the overall circumstances of the hire
This significantly increased the employer’s liability, demonstrating how poor drafting at the offer stage can materially increase financial exposure.
How to reduce your liability in your offer letters
This case is a clear warning to employers that offer letters are not low-risk documents. They can create immediate and enforceable contractual obligations.
1. Include express notice provisions in offer letters
Failure to specify notice, particularly for the period before or at the start of employment, can result in tribunals imposing lengthy “reasonable” notice periods.
At a minimum, ensure:
- probationary notice periods are stated
- post-probation notice is included
- wording is clear and consistent
2. Do not rely on “conditional” wording alone
If you intend for references, checks or approvals to prevent a contract from forming, they must be clearly drafted as conditions precedent.
Generic wording such as “subject to references” may not be sufficient.
3. Assume a contract may exist before day one
Employers should proceed on the basis that:
- a binding contract can arise as soon as an offer is accepted
- withdrawing an offer may amount to wrongful dismissal / breach of contract
4. Assess risk before withdrawing offers
The risk of liability is higher where candidates have:
- resigned from existing roles
- incurred relocation costs
- accepted senior or hard-to-fill positions
In these situations, damages may be more substantial.
From my perspective, the fact that the employment appeal tribunal found differently to the original judge in this case shows how complex both employment and contract matters can be. It also highlights the benefit of obtaining legal advice at the outset of any long-term arrangement, no matter how simple or routine that arrangement may seem.
This decision also reinforces a broader trend in the tribunals: a willingness to look beyond labels and focus on the substance of the agreement.
For employers, the message is clear: offer letters must be treated with the same care as full employment contracts. Failure to do so can turn a withdrawn offer into a costly dispute.
If your organisation routinely issues offer letters or needs to withdraw offers in a changing commercial environment, it is essential to ensure your documentation and processes are robust.
Our Employment team can:
- review and update your offer letter templates
- draft watertight conditional clauses
- advise on the risks of withdrawing offers in specific scenarios
- support you in managing disputes where offers have already been withdrawn
For practical advice on protecting your business contact our Employment team on 03456 465465 or email enquiries@rotherabray.co.uk
