Understanding the Difference Between Offer and Appointment Letters in Employment Contracts

Hi,

I'd like to know if it's compulsory to issue an Appointment Letter to employees. Also, will an Offer Letter suffice?

Please respond!

Best,
Jayashree

Hi Jayashree,

Yes, it is mandatory to issue an appointment letter if a person has joined. An Offer Letter would not suffice because it can be withdrawn before joining by either the employee or employer. An Appointment Letter is a surety that you are on the company's roll now.

Best Regards,
Pratibha

Agreed with Pratibha. By receiving an appointment letter, an employee comes under the purview of rules and regulations of the company.

Regards

Thanks for the replies! Can the Offer Letter state that it's also an Appointment Letter? Just wondering if it makes sense to reduce paperwork... ?

Hi Jaya,

In our organization, we issue direct appointment letters rather than providing offer letters. We follow a specific procedure: once a candidate is selected, we ask them to come in the next day to complete the joining formalities. At that point, we provide two copies of the appointment letter to the candidate. The candidate needs to sign one copy, which is required for HR filing, while the other copy remains with the candidate.

However, this type of procedure is rarely encountered.

Thank you.

To my mind, offer letters have the advantage of doing away with lengthy formalities and serving the purpose of giving confidence that the person has been formally selected and can join duly. It also clarifies the terms of his appointment. The difference between an offer letter and an appointment letter does have a technical distinction in meaning. An offer could be withdrawn before one joins, typically under very special circumstances only. However, including the critical terms and conditions of the appointment that matter to the individual and the organization's policy may well be covered in the offer letter. This could serve as an appointment letter, eliminating the need for an additional letter later. It all depends on how the organization prefers to handle matters within their internal procedures. Candidates join and work if they are satisfied with the offer and based on the briefings given to them, which should be transparent and complete. Encouraging them to address all their queries helps build mutual trust, which I consider more important than over-worrying about the technicalities of letters.

Several companies provide an offer letter and stop at that. The candidate signs and returns a copy in acceptance, mentioning the likely joining date. A joining report is signed upon joining as proof of joining in the company records if the internal procedure suggests.

The general policies and practices of the company are briefed at induction through induction guides or service manuals. This enables the new joiner to feel familiar with the organization and its work culture.

A well-designed offer letter could eliminate the need for the appointment letter by covering all critical aspects, keeping the candidate informed and avoiding surprises. This could be a matter of opinion and practice!

Regards,
Kshantaram

It's clear that an offer letter means from the company's side you are offering some amount and terms and conditions to a particular selected employee. As of that, he/she is not your employee. The offer letter may contain the expected date of joining, probation period, salary offered by the company, etc.

An appointment letter will be issued after the joining of that employee. It's duly signed by the particular employee and other management representatives.

Offer letter is like a quotation for any item (telling the price by salesperson). Appointment Letter is like a bill (buying the same item). Offer tells what the company offers to the person. Appointment letter confirms the same with agreed terms. So, an Appointment is a must.

It is necessary to issue an appointment letter.

An offer letter may not be sufficient to meet any legal obligations against the employee.

Good to read your views. While I agree an Appointment Letter helps to make a new recruit feel more comfortable at the company, I liked kshantaram's suggestion of making the Offer Letter comprehensive. We're increasingly facing issues of cost-cutting, and maybe this will help in reducing paperwork and costs. Thanks, everyone!

Well, I can say it depends on organizational culture. Some organizations only issue offer letters, and the joining date is also mentioned in them. Based on the receipt of such an offer letter, an employee may resign and subsequently join the particular company that issued the offer. The organization cannot deny the job offer unless it expires as per the mentioned date on it.

Thanks

Offer letter indicates that we are offering this position to you, along with the pay and all other remaining terms and conditions of the company. If the person agrees, they must return the same xerox copy of the offer letter to the company. Only after that will the company issue an Appointment letter to the person. The Appointment letter confirms that they are joining the company. This is the process followed in our company. If I am wrong, please let me know.

Manjusha
Human Resources
Hyderabad

Whatsoever it may be - an offer letter or an appointment letter, both are important. However, one more thing - if the terms and conditions are acceptable and both sides agree with them, then you may proceed. Otherwise, either party may withdraw the offers.

Manoranjan

Hello,

Many companies have different procedures; however, I would like to address the legality of these two letters.

Let us start with the first and foremost issue of any employment... an employment contract between the employer and the employee.

When an offer letter is issued with all terms covered, including the date of joining and specifying that the letter shall be returned within a stipulated period, it is the first step of the contract.

Then, the employee signs the letter, hands it over to the employer, and states that they will join within the stipulated time; the contractual obligation begins for both parties. In fact, the employer cannot withdraw the offer, and the employee cannot avoid joining. If an employee does not join, legally, the employer can sue them for breach of contract.

An offer letter duly agreed upon by the employee completes the process of the contract, and hence there is no need for an appointment letter.

Consider if an offer letter does not mention the notice period, and the appointment letter discusses it, then the employee can argue that they were not informed about the notice period before resigning from their previous job, and hence cannot accept it. This plea would be upheld by any court.

Therefore, it is essential that offer letters are comprehensive, and the organization must ensure they are duly signed.

If this process is in place, then there is no need for an appointment letter. In fact, I do not recommend having two letters, as the terms in the appointment letters can be challenged.

Siva

Yes, it is mandatory to issue an appointment letter once a person has joined. An Offer Letter typically mentions only the "Designation" and "Gross Salary." The employee's responsibilities, duties, nature of work, salary breakdown, and termination details are usually included in the appointment letter or a detailed offer letter. Additionally, notice period and termination details are specified in the appointment letter exclusively.

Best Regards

It is not mandatory to issue the appointment letter subsequent to the issuance and acceptance of the offer because when the offer is accepted, it becomes a contract of employment (Indian Contract Act). An appointment is, after all, a contract between the employer and the employee. However, it has become the practice to issue an appointment letter followed by an offer letter.

Regards,
Nagaraju

Hi all,

The difference between an Offer Letter and an Appointment Letter is as follows:

Offer letter: This means we are offering a job to the candidate based on their performance in the interview (ending time). It is up to the candidate to accept or decline the offer.

Appointment Letter: This is issued when a candidate accepts our job offer and wishes to join our organization. At that point, we provide the Appointment Letter instead of the Offer Letter.

Keyur Patel

Anybody can help with issuing an appointment letter for the position of Assistant Accountant in the private company.

Dear Jayashree,

An offer letter is usually a confirmation of an employment offer to the candidate, and it contains details of the salary breakup. It serves to bridge the time gap between oral communication to the candidate about their selection and the actual generation of the appointment letter. In companies like mine, the appointment letter is only generated after the submission of relevant documents and the satisfaction of a medical examination.

An appointment letter is, however, issued only after the candidate submits the necessary documents (degrees, certificates, bonafide letter, relieving and experience certificates from past employers, etc.) and clears the pre-employment medical test. The appointment letter also includes the terms and conditions of employment.

I hope I have addressed your query. Have a good day.

Regards,
Divya

Good to see the discussion still on.

Divya >> You have a point about documents being submitted for HR to issue appointment letters. Makes sense! And well, I also agree about making the offer letter as comprehensive as possible.