Most employment lawyers have, at some point, stared at the words "subject to satisfactory references" on an offer letter and wondered what, precisely, they are looking at. Is there a contract yet? Or is this just an elaborate expression of intent — a handshake that hasn't quite landed? The answer matters enormously when the employer pulls the offer before the candidate's first day.
In Kankanalapalli v Loesche Energy Systems Ltd [2026] EAT 49, the Employment Appeal Tribunal has provided the clearest guidance in years on this question — and the answer will not comfort employers who treat conditional offers as cost-free options.
The Facts
The claimant was offered a project manager role in September 2022. The offer letter set out salary, hours, start date, holiday entitlement, bonus, and pension. It was expressed as "subject to receipt of satisfactory references, a right to work check and a successful six month probation period". The claimant accepted by email. The employer confirmed it was "pleased" he was joining and suggested he secure a 12-month rental near the workplace.
Two weeks later, the employer withdrew the offer. It had never contacted the claimant's referees. It had never verified his right-to-work documents (those were to be checked on his first day). It simply changed its mind.
The ET's Error
The Employment Tribunal treated the three conditions as conditions precedent — barriers to contract formation. On that analysis, no contract existed, no notice was owed, and the employer was free to walk away. The tribunal did not engage with the claimant's argument that the conditions were subsequent — grounds on which an existing contract could be terminated, but not obstacles to its creation.
That failure to engage was, in itself, a reversible error. But the EAT went further.
Conditions Subsequent: The Decisive Factors
Judge Susan Walker KC held that the conditions were subsequent, not precedent. The reasoning is worth unpacking because it provides a practical framework for similar disputes.
First, the offer letter contained "all the key terms" of an employment contract. It was not a preliminary expression of interest. It specified everything needed for performance to begin.
Second, the employer's own new-starter paperwork told the story. The reference details form stated: "I understand that my employment may be terminated without the provision of satisfactory references." Not "I understand that no employment exists" — but that employment may be terminated. Language of an existing relationship, not a contingent one.
Third — and this is the point that should have been obvious from the start — the probation condition can only logically operate as a condition subsequent. A six-month probation period presupposes that employment has begun. You cannot be on probation in a job you do not yet have. All three conditions were grouped together in a single clause, with no attempt to differentiate them. If one is subsequent, they all are.
The Notice Point
With a binding contract established, the question became: what notice was the claimant entitled to? The contract was silent on the point.
The ET had relied on Wishart and Mellors v RPS Rainer for the proposition that an employer's dissatisfaction with references could justify termination without notice. But neither case was analogous. In both, references had actually been obtained and found wanting. Here, the employer withdrew without seeking references at all. Those authorities simply did not speak to this situation.
The employer also pointed to its standard employment terms — produced for the first time during litigation, six months after the contract was formed — which provided for one week's notice during probation. The EAT dismissed this. Terms disclosed only in litigation cannot be incorporated retroactively into a contract formed months earlier. Nor could the employer rely on the notice provisions in another employee's contract as evidence of "custom and practice". Custom and practice must be industry-wide or location-wide; one employer's internal preference does not suffice.
On the correct approach, reasonable notice is assessed at the date of contract formation — not at termination. The EAT determined three months was reasonable, based on: the seniority of the role, the international relocation involved, the length of the interview process, and the employer's own suggestion that the claimant commit to a 12-month tenancy.
One further point deserves emphasis. The EAT rejected the notion that the analysis should start from zero and work upwards. The statutory minimum under section 86 of the Employment Rights Act 1996 is a floor, not a default. It does not follow that a contract silent on notice attracts only the statutory minimum.
Practical Takeaways
- Drafting conditional offers: "Subject to" does not automatically create a condition precedent. If the offer letter contains substantive terms — salary, hours, start date, benefits — a court is likely to find a concluded contract subject to conditions subsequent. Employers who want genuine conditions precedent must draft them as such, clearly and separately from the substantive terms.
- Probation as a tell: The inclusion of a probation period in the same clause as references and right-to-work conditions is almost conclusive that the conditions are subsequent. Probation only operates within an existing employment relationship.
- Self-defeating withdrawal: An employer who withdraws an offer without first attempting to satisfy the conditions it imposed invites the inference that the conditions were never intended as barriers to formation. The EAT noted, but did not need to decide, whether a subsidiary obligation existed not to withdraw before conditions could be fulfilled.
- Implied notice for senior roles: Three months is not unusual where the role involved international relocation and a lengthy recruitment process. Employers cannot retrospectively rely on standard terms that were never communicated to the employee.
- The timing anchor: Reasonable notice is fixed at the moment of contract formation. Everything the parties knew and contemplated at that point is relevant. Nothing that happened afterwards — including the employer's belated discovery of its own standard terms — can alter it.
Too many employers treat conditional offer letters as though they carry no weight — a right to employ if convenient, with no obligation if not. Kankanalapalli is a reminder that contract law does not work that way. If you set out all the terms of a job and the candidate accepts, you have a contract. The conditions let you end it early. They do not let you pretend it never existed.