Did the contract have a probation clause? If so you're up the creek without a paddle since probation clauses enable you or the employer to terminate the contract within the probation period. Was the contract of employment subject to reference checks? Quite unusual they done the reference checks after offering the job, sounds to me like they wanted to hire someone else and used that as an excuse. The reference checks would be grounds for dismissal since they should have done their due diligence before making the offer, so if there is no probation period you might be able to obtain a bit more compensation.