Can you legally rescind a job offer?

Rescinding an accepted job offer could be an expensive exercise, with employers told to be sure before inviting their prospect to sign on the dotted line.

Most employees in Singapore commence their employment with a probationary period of three to six months, after which they are made permanent.

Employers are entitled to terminate the employment contract before the probationary period comes to an end, by providing notice of usually 1-2 weeks or as stated in the contract, or by paying salary in lieu of notice.

However, HR teams have been advised to be aware of their responsibilities as soon as their employee signs their name on an employment contract.

Law firm David Lim & Partners LLP’s litigation department head Doris Chia told HRD Singapore that a job offer is the same as any other offer – it has to first be accepted by the employee in order for it to be binding on the employer. 

“If the job offer was made but not yet accepted, then there is no binding contract which can be breached by the retraction of the job offer,” she explained.

However, if an employee has indeed been given a contract to sign, it is not as easy for a HR manager to go back on the offer and change their mind.

“A revocation of the job offer will cause the employer to be in breach of contract and it will be liable for any damage which may be suffered by the employee,” Chia told HRD.

For example, Chia said if the potential employee had resigned from his or her old job as a result of the job offer this could result in liability, particularly if any new job they find ends up paying less and disadvantaging them financially.

“The loss will be the difference between what the employer would have paid him and what he was earning in the previous position or in the new ‘second choice job’,” Chia said. “However, such compensation must be reasonable and depends on the circumstances of each case.”

Employees in Singapore are governed by the Employment Act or the terms of their employment contract, and employers and HR staff are obliged to follow legal obligations under contracts, including probationary periods.

There are a number of reasons employers can choose to terminate employees under the Employment Act. They include unsatisfactory probation performance, breach of contract by an employee, employee dismissal on grounds of misconduct, employee dismissal on grounds other than misconduct, employee transfers, employee retirement and employee retrenchment.