A recent Employment Appeal Tribunal (EAT) decision has highlighted how a conditional job offer employment contract can arise earlier than many employers may expect, even where checks and onboarding steps are still ongoing.

In Kankanalapalli v Loesche Energy Systems Ltd, the EAT found that an employer breached contract when it withdrew a project manager role shortly before the agreed start date, despite the offer being described as “subject to” references and right to work checks.

For employers and HR professionals, the case is a useful reminder that recruitment processes, onboarding activity, and contractual wording all matter. It also reinforces that tribunals will look beyond labels and consider the reality of what both parties understood and agreed.  The decision is particularly relevant for employers managing delayed projects, restructures, recruitment freezes, or international hires.

 

What happened?

The claimant applied for a project manager position with the respondent company and received an offer on 23 September 2022. The offer proposed a start date of 1 November 2022.

The offer letter stated the role was:

• subject to satisfactory references
• subject to a right to work check
• subject to a successful six-month probation period

The employer also confirmed that a formal contract of employment would follow before the claimant’s first day.

Following further discussions, the employer agreed to contribute £3,000 towards relocation expenses because the role involved work connected to the Dominican Republic. The claimant confirmed the terms were acceptable and stated by email: “Please take it that I accept the offer.”

The employer responded positively, saying it looked forward to the claimant joining the business.

The claimant then completed onboarding paperwork, provided referee details, and submitted right-to-work documents electronically.

However, on 7 October 2022, the employer informed the claimant that there had been delays affecting the underlying project and asked whether he could instead start on 3 January 2023.

A few days later, the employer withdrew the role entirely.

The claimant brought a breach of contract claim.

 

The central legal issue

The key question was whether a conditional job offer employment contract had already been formed before the offer was withdrawn.

The original Employment Tribunal concluded there was no binding contract because the conditions in the offer had not yet been satisfied. In particular:

• references had not been received
• original right-to-work documents had not yet been physically checked

The tribunal therefore treated the conditions as conditions precedent.

In simple terms, that means the tribunal considered the contract had not yet come into existence.

The EAT disagreed.

 

Conditions precedent vs conditions subsequent

One of the most important aspects of this judgment is the distinction between:

• conditions precedent
• conditions subsequent

The EAT made clear that simply using wording such as “subject to” does not automatically determine which type of condition applies.

Condition precedent
A condition precedent means:
the contract does not exist unless or until the condition is fulfilled.

Condition subsequent
A condition subsequent means:
the contract already exists, but it may later be terminated if the condition is not satisfied.

The distinction matters because if a contract already exists, contractual obligations may also already exist, including obligations around notice.

The EAT found the Employment Tribunal failed to properly consider the claimant’s argument that the conditions were actually conditions subsequent.

That failure was significant enough for the appeal to succeed.

 

Why the EAT concluded a contract existed

The EAT looked closely at the overall reality of the relationship and the conduct of the parties.

Several factors influenced its decision:

• the offer letter already contained the key contractual terms
• the claimant had clearly accepted the offer
• onboarding activity had already begun
• relocation arrangements had been discussed
• the employer had prepared for the claimant joining
• the probation clause itself could only operate after employment had started

The probation clause became particularly important.

The EAT noted that a probationary period can only exist once employment has already started. Because probation was grouped together with the other conditions, this supported the interpretation that all three conditions were intended to operate after the contract had already been formed.

The EAT therefore concluded the conditions were conditions subsequent, not precedent.

 

The notice issue

The offer letter did not include a notice provision.

The original tribunal concluded that if a contract existed at all, the claimant would effectively have been entitled to little or no notice because he had not yet started employment.

Again, the EAT disagreed.

The judgment emphasised that statutory minimum notice provisions do not automatically define what is reasonable in every contractual situation.

Instead, the court considered the wider circumstances, including:

• the seniority of the project manager role
• the length of the recruitment process
• the fact the claimant was relocating internationally
• the employer encouraging a 12-month rental arrangement
• the level of reliance placed on the offer

The EAT agreed that, on the facts of this case, reasonable notice was three months.

The employer was therefore found to be in breach of contract for withdrawing the role without providing reasonable notice.

 

Practical lessons for employers and HR professionals

 

“Subject to” wording is not enough on its own

This case is a reminder that contractual wording must be read in context.

Using phrases such as “subject to references” or “subject to checks” does not automatically prevent a binding contract from existing.

Tribunals may look at:

• the overall wording
• onboarding activity
• what both parties reasonably understood
• how the relationship was progressing in practice

Be clear about the status of conditional offers

Where employers intend checks to operate before a contract exists, this should be clearly drafted.

That includes carefully distinguishing:

• pre-employment conditions
• probationary arrangements
• business approval requirements
• project-dependent roles
• funding contingencies

This becomes particularly important in project-based environments where operational changes may affect recruitment decisions after offers are issued.

 

Onboarding activity can create expectations

The EAT placed weight on the fact the employer had already:

• started onboarding processes
• requested documentation
• discussed relocation arrangements
• prepared for the claimant joining

Those actions reinforced the impression that the employment relationship had already been established.

Employers should not assume that a conditional job offer employment contract cannot exist until day one of employment.

From an HR perspective, recruitment activity and operational activity need to stay aligned. Where uncertainty still exists internally, onboarding processes should be handled carefully.

 

Notice obligations can arise before employment starts

One of the more striking aspects of the judgment is that the claimant never actually started work, yet the employer was still found liable for notice pay.

The case reinforces that contractual exposure can arise earlier than some employers expect.

That risk may increase where:

• senior appointments are involved
• relocation is expected
• candidates resign from existing roles
• extensive commitments are made based on the offer

 

What this means in practice

This decision reflects a wider theme often seen in employment disputes: process and assumptions matter.

Operational changes happen. Projects get delayed. Budgets shift. Hiring plans change.

But where employers move quickly from offer stage into onboarding and preparation, tribunals may conclude that the relationship has already progressed beyond a tentative recruitment discussion.

For HR professionals, the case is also a reminder that contractual risk does not sit only within legal drafting. It often emerges through the interaction between:

• recruitment
• operational decision-making
• onboarding processes
• communication with candidates

Small assumptions made early in the process can later become legally significant.

 

Final thoughts

The EAT’s decision in Kankanalapalli v Loesche Energy Systems Ltd is a useful reminder that conditional offers are not automatically risk free.

Tribunals will look at the substance of the relationship, not simply the labels attached to it.

Where an employer’s actions suggest a working relationship has already begun to take shape, contractual obligations may already exist too.

For employers and HR professionals, careful drafting, aligned internal processes, and clear communication remain essential long before day one arrives.

This case is a reminder that a conditional offer employment contract may exist long before employment formally begins.