Knowledge You have found the right candidate for the role, now it is time make a job offer. In this instalment of our ‘Life Cycle of Employment Series’, we discuss some of the key factors employers should consider before making a job offer to a prospective employee. Getting this step right is crucial to securing the ideal candidate for the role.
Key considerations before making a job offer
Before extending an offer of employment, it is important to ensure that all necessary steps and checks are conducted to avoid issues later in the hiring process.
The following should be considered before making a job offer to a prospective employee:
- Does the candidate meet the required skills, qualifications, and experience for the role?
- Has any required sign off from relevant internal stakeholders been obtained?
- The terms of employment such as salary, benefits, hours of work, and conditions of employment.
- Has a reference check been completed?
- Is a criminal record check, visa check, credit check or any other checks required?
Offer letter
Once the above steps have been completed and you are satisfied with your selection, it is time to prepare and send an offer letter to the selected candidate. The offer letter should set out the key terms and conditions of employment. It should include:
- The job title and a brief description of the role.
- The proposed salary and any bonus or incentive structures.
- The anticipated start date.
- Any conditions (such as successful completion of pre-employment checks). Specifically, the offer letter should state that any conditions of employment must be met before the offer becomes binding.
- Details of employment benefits (e.g., leave entitlements, health insurance, or other perks).
- A summary of key responsibilities and reporting lines.
- A statement advising the employee of their right to seek independent legal advice before accepting the offer.
- A clear deadline for the candidate to accept or decline the offer.
Verbal job offers
Although it is best practice to make a job offer in writing, it is important to note that job offers can be made verbally and once accepted can be binding.
Verbal offers should clearly outline any conditions that must be met before they become binding and should be followed by a written offer letter and employment agreement. This ensures that the candidate is clear about the terms and conditions of employment being offered and avoids any potential disputes arising in the future.
Why setting a deadline for accepting a job offer is crucial
Setting a deadline for accepting a job offer is crucial because it clearly defines how long the offer remains open for acceptance. Without a specified deadline, the timeframe for acceptance is open to interpretation.
The deadline should allow the candidate sufficient time to review the terms, seek independent advice if needed, and come back with any questions or proposed amendments.
Counter offers
It is common for candidates to respond to a job offer with a counteroffer, seeking to negotiate certain terms such as salary, benefits, start date, or other conditions of employment.
When an employee makes a counteroffer, it is important to:
- Carefully consider the candidate’s requests and the reasons behind them.
- Assess whether the proposed changes align with your organisation’s policies, budget, and business needs.
- If you are able to accommodate the counteroffer, confirm the revised terms in writing. If not, explain your position and the reason behind it if possible.
Being flexible and keeping an open mind to reasonable negotiations is likely to help secure your preferred candidate, especially in a competitive market where candidates often have multiple opportunities to consider. This approach can make your offer stand out.
Employment Agreement
An individual employment agreement outlining all terms and conditions of employment can be provided alongside the offer letter when making a job offer. We consider this best practice. The next article in our ‘Life Cycle of Employment Series’ will focus on key elements of a legally compliant individual employment agreement.
Withdrawing a job offer
There may be circumstances where an employer needs to withdraw a job offer after it has been made. Whether an employer can lawfully withdraw an offer will depend on the status of the offer at the time of the withdrawal.
A job offer can generally be withdrawn at any time before it has been accepted, provided the withdrawal is expressly communicated to the candidate before they accept the offer. This is because, until acceptance, there is no binding employment agreement in place.
However, withdrawing a job offer once a candidate has accepted the offer, whether verbally or in writing can expose the employer to legal risk. At that stage, the individual is likely to be considered an employee under the Employment Relations Act 2000, and withdrawing the offer may amount to an unjustified dismissal or breach of contract claim.
A job offer can also be withdrawn if it was made subject to certain conditions (such as satisfactory reference or background checks) and those conditions are not met. It is important that any such conditions are clearly stated in the offer letter, so both parties understand when the offer is conditional and when it becomes binding.
When a job offer becomes binding
A job offer generally becomes binding once the candidate accepts it, whether in writing, verbally, or through conduct, and any conditions attached to the offer have been met.
It is well accepted by the Employment Court that the following conduct may suggest the acceptance of an offer has occurred:
- The letter of offer did not require employees to confirm their acceptance;
- Subsequent letters to the employees were addressed to “staff”;
- The employees were rostered on to work; or
- The employees were already working in the job.
Once acceptance has occurred, both parties are bound by the terms of the offer, and a withdrawal of the offer at this stage is likely to give rise to an unjustified dismissal claim.
The steps outlined above should help make the job offer process seamless. If you would like some further guidance before making a job offer, get in touch with the team at Black Door Law.
Disclaimer: This information is intended as general legal information and does not constitute legal advice. If you have a specific issue and wish to discuss it, get in touch with the Black Door Law team by email hello@blackdoorlaw.co.nz or calling (04) 2803980.