Conditional Job Offers: Withdraw with Care

Employers often assume that a conditional job offer, that is conditional of a background check or regulatory approval of such like, can be withdrawn freely before an employee’s first day if that condition has not yet been met. However, a recent UK Employment Appeal Tribunal decision, Kankanalapalli v Loesche Energy Systems [2026] EAT 49, shows why that assumption can be risky.

While not binding in Hong Kong, the reasoning closely aligns with Hong Kong contract law principles and the termination framework under the Employment Ordinance (Cap. 57). The case is a timely reminder that, once accepted, a conditional offer may already expose employers to contractual liability if withdrawn without notice.

The case in brief

In Kankanalapalli, the employer offered him a senior project manager role subject to:

• receipt of satisfactory references,
• a right to work check, and
• successful completion of probation.

The role required relocation and a start date had been agreed. Yet, no notice period was provided in the offer. The candidate accepted the offer by email and undertook onboarding steps. He provided personal details, right to work documentation and referee contact details. Before his start date, the employer withdrew the offer due to project delays.

The employer took the position that the offer remained conditional and that no binding contract had been formed. The candidate disagreed and brought employment tribunal proceedings.

At first instance, the Employment Tribunal held that there was no binding contract because the conditions were not yet satisfied. It found that the offer had been validly accepted by the candidate but no contract had arisen because the reference and right to work conditions were treated as conditions precedent to contract formation.

The Employment Appeal Tribunal disagreed with the Employment Tribunal’s approach. It focused on whether the stated conditions operated as conditions precedent or conditions subsequent as a matter of construction.

The Employment Appeal Tribunal held that:

• “Conditional” does not automatically mean non‑binding – Whether conditions prevent a contract from forming (conditions precedent) or instead allow termination of an existing contract (conditions subsequent) depends on the wording and surrounding context. There is no automatic rule.
• A binding contract had been formed on acceptance – The offer set out all key employment terms, the conditions were grouped together (including probation), and the employer had taken steps consistent with onboarding. On proper construction, the wording around references suggested termination if unsatisfactory, rather than no contract existing until provided. Therefore, the conditions operated as grounds for termination, not as barriers to contract formation.
• Withdrawal was not unrestricted – Even if conditions remain outstanding, an employer may not have an unrestricted right to withdraw an accepted offer for unrelated reasons.
• Reasonable notice was implied – As the offer was silent on notice, a term requiring termination on reasonable notice was implied. Reasonable notice must be assessed at the time the contract was entered into, not by reference to later‑produced standard terms or statutory minimums alone.
• Three months’ notice was reasonable – Having regard to the seniority of the role, international element, and expectations created during recruitment, three months’ notice was appropriate. Withdrawal without notice was therefore a breach of contract.

Relevance for Hong Kong employers

Although Kankanalapalli is not binding in Hong Kong, its reasoning sits comfortably with Hong Kong law and is likely to be treated as persuasive.

Under Hong Kong law, an employment contract may be formed before the employee commences work once an offer is accepted and the essential elements of contract are present. The absence of a signed formal contract, or the fact that employment has not yet started, is not determinative.

Conditions commonly found in Hong Kong offer letters – such as reference checks, background screening, or work authorisation – will not automatically prevent contract formation. Unless the offer clearly states that no contract arises unless and until the conditions are satisfied, such conditions may be construed as allowing termination rather than negating the existence of the contract altogether.

The inclusion of probation as a “condition” may be a particularly telling indicator that the parties contemplated an existing contract capable of termination, rather than no contract at all.

Where a binding contract exists but is silent on notice, Hong Kong courts may imply a requirement for reasonable notice at common law. Section 6 of the Employment Ordinance reflects Hong Kong’s statutory preference for termination by notice rather than at will. While section 6 applies primarily after employment has commenced, it reinforces the broader legal context in which termination without notice is exceptional and, absent clear agreement, notice obligations should not be lightly displaced.

The position in Hong Kong will also be altered by the fact that:

1.    section 6 of the Employment Ordinance allows termination without notice by either party during the first month of an expressly agreed probation period (if any), and

2.    section 7 allows termination with immediate effect by payment in lieu of the period of notice (whether express or implied) calculated by reference to wages that have been earned in the previous 12 months. That is arguably zero if the employment has not commenced.

However, the contract may have commenced and sums earned without an agreed period of probation, albeit subject to conditions subsequent, and other payments might be due and payable upon formation of the contract such as sign-on bonuses and such like. As such the guidance in this case is still likely to have relevance to circumstances in Hong Kong.

Practical takeaways for employers

• Draft offer letters carefully – If no contract is intended until conditions precedent are satisfied, this must be stated clearly and expressly. Also notice periods, both generally and applicable during probation periods, should be appropriate and clearly stated.
• Avoid mixed signals – Onboarding steps, relocation discussions, or assurances about future work may support a finding that a binding contract already exists.
• Consider notice – If withdrawal becomes necessary, terminating with notice (or payment in lieu) may significantly reduce legal exposure.

Employers in Hong Kong should bear in mind that the bottom line is that pre‑employment does not necessarily mean pre‑contract. Withdrawing an accepted conditional offer in Hong Kong can carry real contractual risk.

Russell Bennett

For more information on employment matters, please contact:

Russell Bennett
Partner | Email

Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

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