What can you do if a job offer is withdrawn after you’ve accepted and resigned from your old job? The question is a simple one, but the answer turns out to surprisingly difficult.

The first practical step to take if this happens to you is to approach your existing employer about whether they will accept a retraction of your resignation. This is less likely to work, of course, if you have taken the opportunity of your resignation letter to tell some home truths.

If that fails, do you have any rights against the new employer that has let you down? This divides into two parts:

1. Do you have any contractual rights at all?

This will depend on whether you have entered into a binding contract with the new employer. If the offer was made conditional on something – receipt of satisfactory references, for instance, or a satisfactory medical examination – then you almost certainly don’t have a binding contract. But if you had agreed the main terms of employment – salary, start date, working hours, location etc. – and no-one had said anything to suggest that the offer might yet be withdrawn, then your new employer is probably in breach of contract. In particular, it doesn’t matter that you don’t yet have a written contract signed by both sides: there is nothing to say that a contract of employment has to be in writing.

2. How much will you get in damages?

You might think you’d be entitled to substantial damages. After all, if your employer hadn’t withdrawn the offer in breach of contract, you’d be earning in a new job by now, and probably expecting to stay in it for some time. As it is, you’re unemployed and earning nothing. That’s potentially quite a lot of money you’ll have lost before you find another job.

Unfortunately, when employees have tried to argue that they should be compensated for what they would have earned if their contracts had not been unlawfully terminated, the courts have always held that they are limited to what they would have received if their contracts had been lawfully terminated. See Lavarack v Woods; Janciuk v Winerite Ltd. Lawful termination means termination on whatever the contractual notice period is, so damages will be limited to pay during the notice period. Unless you’re very senior, your notice period during the first year of your contract will probably be short – quite possibly as little as a week, and probably not more than a month at best. So unless you find another job quickly, your damages won’t compensate you for much of your loss.

However, what doesn’t seem to have been tried in this context (so far as the authors of this blog are aware) is a claim for what is called ‘reliance loss’ – that is, a claim for what you have lost by reason of your expectation that the new employer would perform its part of the contract, rather than for what you have lost because it didn’t. Accepting that you can’t get damages to reflect your earnings in the new job for longer than the contractual notice period, why shouldn’t you get damages to reflect the loss of your old job? And why should those damages be limited by an artificial assumption about when your old employer might have lawfully dismissed you if you hadn’t resigned?

If you want to run an argument along these lines, you probably won’t find any case-law in the employment context that helps you, so you will need to look at cases on reliance loss in a contract textbook.

The previous post about references focused on what you could do about a bad reference.

Another question that arises is whether you can make a reluctant employer or former employer give you a meaningful reference at all – what can you do if they just say ‘It’s not our policy to give references’ or ‘It’s our policy only to give a factual reference confirming job title and dates of employment’?

Unfortunately, the answer to this will almost always be ‘nothing.’ For some employees at certain points in their careers, at least as much of the value of a particular job will lie in the experience gained as in the money earned. The value of the experience is significantly diminished if your former employer refuses to back you up with confirmation that your responsibilities were what you say they were and you discharged them satisfactorily. Nevertheless, although you have a clear contractual right to your pay, whether or not there was ever a contract in writing, you will only have a contractual right to a fair reference if you had the foresight – and the bargaining power – to write it into your contract when you started.

If you are about to start a new job, and you do feel confident enough to rewrite your contract of employment, you might try inserting something like this:

The Employer will promptly on request by any potential future employer of the employee provide a reference for the Employee confirming the duties undertaken by the Employee, commenting fairly on her performance of those duties, her attendance and her character, and referring as appropriate to her significant achievements in the post. The Employer will give the Employee the opportunity to read and comment on a draft of the reference before it is sent. This clause survives the termination of the employment relationship.

You can tackle this kind of negotiation head on by asking for a meeting and/ or sending a draft amended contract to your new employer with an invitation to them to produce a final draft for your signature. Alternatively, you could try and take advantage of the kind of inertia that employers more often benefit from. Make your changes in manuscript on the contract you have been given to sign, sign it and send it back with a covering letter (keeping a copy of both, of course) saying something like ‘I enclose a signed copy of my contract, with certain amendments which I hope will be acceptable.’

The purpose of the covering letter is to make sure they can’t say later that they didn’t realise you’d made any changes: but if you’re lucky, the HR officer who receives your letter may just file your amended contract and leave it at that. If so, you can take it that your amendments are agreed.

This is a post about avoiding a certain kind of dispute with your employer, rather than winning it.

Section 11(2) of the Copyrights Designs and Patents Act 1998 reads:

Where a literary, dramatic, musical or artistic work is made by an employee in the course of his employment, his employer is the first owner of any copyright in the work subject to any agreement to the contrary.

Employees often learn from their employment, and may produce work – articles, books, computer programmes – that draws on their working experience and makes use of it. Section 11(2) means that if your employment contract is silent on the subject of intellectual property, your employer may own the copyright in material of this kind that you produce during working time.

That much will often be fair enough. If you want to ensure that intellectual property in any particular material or kind of material remains with you, one possibility is to make sure that you create it in your own time, and (to avoid any room for dispute) away from your workplace. If you create something in your own time that you want to use for the purposes of your employment, make it clear at the time, preferably in writing, that it is work created in your own time that you are prepared to use for your employer’s benefit.

Alternatively, you may want to negotiate for a specific agreement in your contract contrary to section 11(2) that makes it clear that all intellectual property generated by you is yours unless it is created at your employer’s behest and for the purposes of your employer’s business.

Unfortunately, some employers try to include in employment contracts much more comprehensive terms that purport to grab the intellectual property in any work of any conceivable use to the employer that the employee may create during the life of the employment contract, whether or not during working time or using the employer’s equipment, and whether or not it is any part of the purpose of the employment to create intellectual property for the employer.

Clauses of this kind are objectionable. Employment does not give the employer the rights of an owner: that is something different, known as slavery. An employee should be entitled to learn from his experience and develop his skills, and put his skills and experience to use for his own benefit in his own time.

If you see a clause of this nature in your draft contract of employment then, unless you are sure you won’t be creating any intellectual property anyway, you should challenge it. (You should probably challenge it anyway, because letting your new employer get away with nonsense is liable to set the employment relationship off on the wrong footing.) Most employers won’t mean it in fact: if it is there, it is probably because someone working for their lawyers years ago thought it was a hard-nosed kind of clause to include in a precedent, and no-one has given it any thought since. Once you point out what it means, most employers will have the grace to blush and withdraw it.