You make a senior hire. You issue an offer with conditions and include promises about notice, a start date, and termination protection. The hire has not started yet. Something changes. Can you still retract the offer cleanly, or have you already limited your exit?

In Kankanalapalli v Loesche Energy Systems Ltd, the Employment Appeal Tribunal (EAT) held that, despite the employer withdrawing the job offer, the contract remained in place.

What happened?

Mr Kankanalapalli accepted an offer from Loesche Energy Systems Ltd. The offer letter did more than set out a future start date. It imposed obligations on the employer beyond a simple conditional offer, including provisions that restricted when and how the employer could terminate the relationship.

Before he started work, the company withdrew the offer. It treated the employment relationship as not yet ‘live’. Mr Kankanalapalli claimed wrongful dismissal, arguing that the employer had already assumed contractual obligations and could not withdraw without notice or consequence.

What did the EAT decide?

The Employment Appeal Tribunal held that the employer had bound itself through the wording of the offer. The contract created obligations that limited the employer’s ability to withdraw. As a result, the withdrawal constituted a breach and the claimant could pursue a wrongful dismissal claim.

Why did it reach that decision?

The EAT focused on basic contract principles. An employment contract can exist before day one. You do not need the employee to have started work. You need offer, acceptance, and intention to create legal relations.

Here, the wording mattered. The offer did not simply say, ‘This is conditional, and we can withdraw at will.’ It went further. It set out terms that appeared to be a live contract, including termination constraints. In effect, the employer promised more than it intended.

Once those promises exist, the law enforces them. You cannot rely on the fact that the employee has not started. If you have agreed notice provisions or limits on termination, those terms apply from the point the contract forms, unless you clearly state otherwise.

The tribunal also looked at how a reasonable person would read the document. If the wording suggests security, the court will not rescue the employer from its own drafting. This is not about fairness in a broad sense. It is about what the parties agreed to in writing.

What should you do?

• Treat offer letters as binding documents, not placeholders. Assume a tribunal will read every word literally.
• Separate ‘offer’ from ‘contract’ if you want flexibility. Use clear conditional language and reserve an express right to withdraw before the start date.
• Align termination clauses with your real intent. If you do not want notice obligations before day one, say so in plain terms.
• Tighten governance on senior hires. Legal review of offer templates should not be optional at this level.
• Keep a clean audit trail. Record why you withdraw an offer and check the contractual route before you act.

This case is a reminder that small drafting choices create real liability. The cost is not just damages. It is distraction, reputational risk, and awkward board conversations.

Source: Mr Sita Rama Swamy Kankanalapalli V Loesche Energy Systems Ltd: [2026] EAT 49 – GOV.UK