EAT Judgment of Kankanalapalli v Loesche Energy Systems

The Employment Appeal Tribunal’s (“EAT”) decision in Kankanalapalli v Loesche Energy Systems Ltd is an important case on when an employment contract comes into existence, and the consequences of withdrawing a job offer before employment begins. This case highlights the fact that accepted offers of employment can constitute binding contractual obligations even before an employee’s first day at work.

Background

Mr Kankanalapalli accepted an offer of employment as a Project Manager, subject to standard conditions including satisfactory references, right‑to‑work checks and a 6-month probationary period. Before his start date, the employer withdrew the offer due to project delays. Mr Kankanalapalli pursued a claim for in the Employment Tribunal (“ET”) on the basis that the withdrawal of the offer without notice amounted to a breach of contract. The ET dismissed his claim on the basis that the offer in question was conditional and therefore not a binding agreement. Mr Kankanalapalli then appealed to the EAT .

The principal ground of appeal concerned whether the pre‑employment conditions were conditions precedent (preventing a contract from forming), or conditions subsequent (allowing a contract to exist but be terminated if unfulfilled). The EAT held that the ET erred by failing to engage with the claimant’s argument that these were conditions subsequent. Particular weight was placed on the inclusion of a probationary period, which could only operate after the contract of employment had commenced. Acceptance of the offer therefore created a binding contract between the employer and employee.

The EAT also rejected the ET’s alternative finding that the employer could withdraw the offer with minimal or no notice. Where an employer terminates for reasons unrelated to the stated conditions, it is exercising a contractual termination, not merely retracting an offer. No unrestricted right of withdrawal existed as the EAT gave the finding that the ET should have considered whether the employer was in breach of contract in terms of a subsidiary obligation not to withdraw before the date by which the condition had to be fulfilled

In addition, the EAT found that the ET had wrongly assessed notice by reference to matters not known at the time the contract was formed. The EAT confirmed that where a contract is silent, a term of reasonable notice is implied and must be judged at the date of formation. On the facts, three months’ notice was considered to be reasonable.

For employers, this decision should be a warning that “conditional” offers may still bind them contractually, exposing them to notice pay liability if the offer is subsequently withdrawn. Careful drafting and express notice provisions are essential. For employees, the case strengthens protection against sudden withdrawal of accepted offers and confirms that contractual rights can arise even before employment begins.

For further information or to discuss a potential employment law or discrimination claim, please contact our specialist employment solicitors on 0207 3950 5234 or info@rllaw.co.uk. We are ranked as a ‘Leading Firm’ in the Legal 500 and Chambers and Partners independent guides to the UK Legal Profession.

30 April 2026