Two withdrawn job offers caused a lot of ill will recently, as per two personal grievance claims in the Employment Relations Authority (ERA). Business owners will see that it’s bad for business to invite disputes especially with someone who had not done any actual work, and job seekers will need to exercise caution especially if they are intending to resign from one job to start a new one.
The ERA found against both prospective employees, has so far awarded costs against one.
We’ll start with Kennedy v Field Nelson Holdings Ltd (trading as Mitre 10 Nelson).
Mike Kennedy accepted a job offer at the drive-thru of the local hardware store after two interviews. He signed the employment agreement and so did a manager, on 14 April 2021. A start date of 27 April was agreed.
However, a few days before Kennedy was due to start, an employment consultant gave him an apparently negative reference and Field Nelson Holdings withdrew the offer. Kennedy raised a personal grievance on the basis that he was a person intending to work and was unjustifiably dismissed. One year and four months later he lost, and was ordered to pay Field Nelson Holdings a $2,750 contribution to its costs. From analysing the number crunching in the costs determination it appears that Kennedy’s limited financial means were not really taken into account.
This sorry scenario could have been avoided if the employment consultant had just refused to provide a verbal reference when requested by Kennedy. If any jobseeker wants to gather up a few references for their CV, asks one (usually former) manager for a reference and is declined, that’s the manager’s way of saying they don’t think much of their former subordinate but would not be so vindictive as to sabotage the jobseeker’s future by trash-talking them. Most of us have been there! Kennedy would then have known where he stood with person and could have sought an alternative referee.
We are also aware of a sneaky “out” that seems to be on the increase – the paperless employment agreement (IEA). Not long ago I helped a relative complete an employment agreement online, with a digital signature, tick box from memory. It took about 15 minutes and after hitting SEND I was surprised that an emailed copy didn’t appear in the email account on the IEA. Anyway, he held the job for six months until resigning when a better job offer came along, and can’t remember if he ever received an emailed or paper copy.
An example of this was brought before the ERA. A link to a paperless employment agreement was emailed to Chad Edwards, and as above, he electronically signed the IEA at 9.42am on 18 December 2020.
On 8 January 2021 the company he was intending to work for, Laybuy Holdings Ltd, withdrew the offer of employment due to what it claimed was an unsatisfactory pre-employment check. That withdrawal was confirmed by email on 12 January.
Edwards raised a personal grievance, but the ERA found that the offer was conditional and dismissed his personal grievance on 7 September 2022.
We are aware of online IEAs seemingly disappearing into the ether, but mysteriously becoming “unlocked” after an ancillary form (eg: IRD, Kiwisaver) had been submitted, regardless of whether or not the offer was withdrawn.
This raises a few issues for employers wanting to hire staff in good faith and without undue delay:
When your new hire completes your online IEA but doesn’t receive a copy, causing them suspicion that you’re “keeping options open”, why would they hand in their notice at their old job?
Given that it takes around four weeks to process a Ministry of Justice clearance (during which time reference checks can be carried out), are you prepared to accept the risk that by the time the checks are done, your best candidate has accepted an unconditional job offer elsewhere?
Is the convenience of being able to "keep options open" worth the risk of a personal grievance claim, even if based on the above examples you’ll probably win it?
Like it or not, online IEAs are probably here to stay, so candidates and employers may have to get used to it.
Employers should be transparent about whether a document is an employment agreement or a questionnaire, and not put themselves in a position where they look evasive, or worse, invite litigation as per the above examples.
And jobseekers should consider assisting prospective employers by applying to their local District Court for Ministry of Justice clearance (Clean Slate), which is normally valid for three years, and avoids delays with each job application that requires it. Another way to assist and avoid any misunderstanding is to simply email the hiring manager and request confirmation that their offer is unconditional, for example:
“Dear [Manager],
Thank you for the job offer and sending the employment agreement. As discussed, I need to give my current employer 2 / 4 weeks notice which means I could start on [date]. Before I do this, could you please confirm that your offer is unconditional.
Kind regards,
[Candidate]”
That will guarantee you don’t get dicked around like Messrs. Kennedy and Edwards!
For a more legal perspective on withdrawal of offers of employment, see Conditional Offers and the Employment Relations Authority (andersonlaw.nz)
Next article: Out of control "lawfare" on both sides of the Tasman