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Q: What should I do if I have already resigned for a job offer, but that offer is rescinded?

A: Whether a candidate has any recourse against the prospective employer depends on whether both have entered into an employment contract and why the offer was rescinded, says employment lawyer Clarence Ding.

“If the parties have not reached any kind of agreement, and the employee resigns from their current employment pre-emptively, the employee will unfortunately not have any recourse against the company if the offer is subsequently withdrawn,” says Mr Ding, who is a partner at Simmons & Simmons.

However, a binding agreement exists even if employment has not actually commenced, should an employment contract be signed already.

“The company can only terminate the agreement in accordance with its terms, typically by giving notice or by paying salary in lieu of notice,” says Mr Ding.

It can be argued that an employment relationship – albeit one without any express terms – has also been formed when the parties have not yet signed an employment contract, but have agreed on the candidate’s prospective employment, he notes.

In that case, the company can terminate the agreement only in accordance with Singapore law. Companies do so by either giving notice or paying salary in lieu of notice, with only one day’s notice required under the Employment Act, Mr Ding says.

Failure to terminate the agreement arising in either case would amount to a contractual breach that exposes the company to a wrongful dismissal claim, he adds.

However, he notes that “few employees would go through the trouble of filing a claim” in practice.

He explains: “The remedy is unlikely to be significant as the employee’s notice period during the initial period of their employment is typically very short, which means any salary in lieu of notice they are likely to obtain would similarly be a nominal amount – and the employee may gain a reputation as a troublemaker.”

Still, the company is legally entitled to rescind the offer in some situations.

This includes where the contract was entered into by mistake, misrepresentation or where the employee had failed to satisfy set conditions prior to commencing employment, Mr Ding says.

He suggests employees be “slow to resign”, until after the employment contract is signed and a binding agreement is in place between the parties, even if the offer is enticing.

There are warning signs that could foreshadow a rescinded offer, says Mr Rahul Chawla, partner and head of talent solutions for South-east Asia at professional services firm Aon.

A softening economy, negative media reports of the prospective employer’s financials and business performance, and radio silence from the recruiting team could be a cause for worry, he says.

Meanwhile, Mr Ding says possible red flags include the job listing remaining live on platforms like LinkedIn even after a candidate has agreed to join the company, and industry chatter that the company is still hiring for the opening.

Candidates should also be alert if they have signed the contract but the company has not sent an executed copy of the agreement, or when the draft contract is different from the negotiated terms, or the employer says the employment contract will be provided on the first day of work.

Another red flag is an ongoing internal restructuring or lay-offs, Mr Ding notes.

“Individuals, especially those currently between jobs, tend to jump at the first job offer they receive. This is sometimes unhelpful as these individuals may have overlooked certain terms or red flags.”

Instead, they should carefully review all the given information to understand what the role actually entails, what the company’s expectations of the role are, and what timeframe the company is actually looking at.

“If it seems that the company is keen to employ them, the individual should insist on being provided with a draft employment contract for their review and execution.

“Having an executed contract on hand significantly improves the employee’s position against the company, and makes the company liable to pay out the individual’s notice period in the event the company subsequently changes its mind,” says Mr Ding.

For employers’ part, Mr Chawla emphasises the importance of avoiding rescinding offers where possible.

He notes that the practice can potentially impact perceptions of an employer’s brand and human resources practices, to the detriment of its ability to attract and retain talent.

Employers should have a clear strategic direction and accurate workforce growth plans based on data in place before hiring talent, to minimise the need to rescind offers, Mr Chawla says.

He adds: “Another option could be delaying joining dates if they see business requirements picking up.”

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