An agency that is recruiting candidates to be engaged by a hirer could be faced with a difficult situation if a hirer makes an offer to a candidate that is later withdrawn. This may not only damage the relationship with the candidate but could also result in a costly legal claim, as demonstrated by the recent case of McCann v Snozone Ltd.
The hirer in this case engaged an agency to introduce suitable candidates for vacancies as maintenance engineers. Following two interviews, the claimant was verbally offered a position by the agency representing the hirer. This was accepted by the claimant; however the offer was withdrawn before the start date. The judge held that the contract had been formed; therefore notice pay was due if either party wished to terminate the contract and the claimant was awarded damages of £2,708 and tribunal fees of £390.
What can an agency do to protect itself in such situations when it has little control over the decision of a hirer to make (or withdraw) any offers of employment? Ideally you should have terms in place that address these types of situations and allow you to terminate an engagement without notice where an offer is withdrawn by the hirer. In addition, provisions that limit your liability to a candidate may offer some important protection to your business.
Lawspeed can help with suitable contract templates, advice on your existing contracts and termination provisions. Call Lawspeed on 01273 236 236.