Can Employers Take Action When Candidates Reject Offers Last Minute? Seeking Advice on Alternatives

Hi, I wanted to know from an employer's perspective, if a candidate accepts an offer and then rejects it, can we take any legal action or any action at all on the candidate. The offer is not signed, but a soft copy of the offer is sent, and the candidates generally send a return email that they accept this offer and then mention that they will join on a specific date.
My issue is, for certain positions, we give them almost 2-3 months' joining time, as they have the notice period in the other company. In many cases, even after vigorous follow-ups, the candidates tend to reject the offer at the last minute, i.e., just before 1 week of joining, due to various reasons. So in such cases, is there any possibility that we can take any action against such people, or do we have to just leave it, because they are not our employees yet? This has become a huge issue now because we are seeing too many last-minute cancellations, by which all our planning gets disturbed.
Can any of the members help in letting me know if we have an alternative to this? Thanks, Malathy.

Hi Malathy,

I don't think there is any solution to this. Even I am facing this problem. There is no legal way to handle this since the offers are not binding on the person even if he/she accepts; everybody has the right to change their minds.

Now that the markets have opened up, a lot of candidates just collect offers and then pick the best. But because of this unethical practice of some people, we as HR are suffering big time. What I do to tackle this is while shortlisting, I calculate the probability of the candidate not joining at the last moment and thus interview and shortlist a few more CVs and put them on standby. If the first one declines, immediately another offer is made to the next best candidate.

Time is definitely wasted in this exercise but at least you have ready candidates in hand, just in case...

Regards,
Jyoti

Hi Jyoti - I agree, but for certain jobs, we literally exhaust our backups too, and that's where the issue comes.

In some cases, the staffing team has a backup of those candidates who are not the very best. Also, since it's almost a 3-month gap, even those candidates who were as backup either would have accepted another offer in the meantime or not be interested, since we took so much time to revert. So, an immediate replacement becomes very difficult for very senior jobs. If it's an easy job, then I won't worry much, but for senior and tough jobs in the market, we face significant difficulty.

Anyways, thanks for your reply.

Hi,

I also suffered from this situation. People accept the offer letter but change their minds at the last minute. It's their own decision. If you are a candidate and you receive a good opportunity, you may also make a decision like that. It's normal.

In my previous company, after we issued the offer letter, we requested the candidate's resignation letter within the next 7 days. This way, we were certain about their intention to join.

Hi, I have started using another method. What I do is when I send the offer letter, I include a clause stating that once accepted, this offer is binding on both parties. If the acceptance is not sent within 2 days, the offer will expire. So far, it's been effective as candidates tend to think twice before accepting. I recommend trying it yourself and providing me with feedback.

Regards,
Jyoti

Hi, I often face the same issue. Jyoti, could you please clarify how it binds the candidate? Is it something legally binding? If not, then how does it work?

You should maintain a backup with another suitable profile and follow up with the candidate in between when you issue an offer to join in 2-3 months.

When you give an offer to anyone:

1. Just check their willingness.
2. Give a time limit for accepting the offer letter; otherwise, the offer will be automatically canceled.
3. Give a time limit for receiving their resignation.
4. Follow up for joining time promptly.

With Regards,
Vineet Deshmukh

Legal Consequences of Withdrawing After Accepting an Offer

Once an offer letter is signed and accepted, the prospective employee is expected to join the company. However, if the notice period is 30 days and within this period the individual changes their mind, the question arises: Is there any legal punishment for the employee if they decide not to join?

Regards,

The problem you mentioned is quite common and widespread, especially in the IT industry. I believe Jyoti has provided good and practical suggestions. However, there's one aspect of the scenario that doesn't quite fit.

The situation of offer acceptance and rejection before joining is more often observed in junior-to-mid-level positions. But you mention that you are facing this problem with senior-level candidates, who, by virtue of their age and experience, are usually mature and keep their word once given.

Have you explored or examined any other reasons that could be causing the problem you are facing with senior candidates? The possibilities could be many for senior persons acting this way—but you can gauge this only by observing body language during your interactions in face-to-face meetings and teleconferences. This is where Jyoti's experienced suggestion to "calculate the probability of the candidate not joining" comes in.

Another way—though a bit tough to implement—is to insist on references from the last two or three employers. This way, your reference checks would cover a wider time window. I suggest giving careful thought to the queries or questions included in the reference check questionnaire—include indirect queries that would give an idea of the mentality or attitude of the candidate. I hope you get the point.

By the way, what is the domain or field of your company—IT or any other?

All the best.

Regards, TS

Hi, I faced a very different problem. Is there any solution to address this issue? Candidates accept the offer letter and they do join. However, within a week or so, they receive another offer letter and then they just disappear without giving a resignation letter.

Regards, Priyanka

Legal Implications of Offer Acceptance

Legally speaking, an unequivocal offer, when accepted, binds both parties, and either of them can take action as specified in the offer. How the courts would view it would depend upon the terms. Whether you would want to pursue it via the Indian legal system is your choice. Of course, suggestions as already made could be followed, and, as also said, you are not alone!

Long ago, I recall some discussions on "blacklisting" such candidates. But I don't think anything came of it.

Regards.

Managing Offer of Appointment Timelines

An offer of appointment will not bind the other party; however, it is advisable to avoid making an offer for more than a week. If the time frame is extended, candidates may use it as leverage in securing another job. Offers of appointment are typically reserved for higher-level positions rather than subordinate roles. Therefore, it is recommended that an offer of appointment should not exceed a week, and confirmation should be obtained within that period.

It is important to ensure the commitment of the candidate. A simple offer may hold no real significance, causing challenges for HR professionals. Requesting a letter of confirmation with a specified date of joining can help HR manage the situation effectively and amicably. Remember, a loose chain never binds effectively.

Your query is basically whether you can take any action for such declining to join by a person. Once the offer has been accepted by him and he has submitted documents, it becomes a contract under the Contract Act. The employer can file a suit for recovery of damages sustained by it, but it cannot enforce specific performance. Nowadays, under the IT Act, contracts become enforceable through emails, even through which he accepted the offer.

Thanks

Suggestion for Managing Offer Acceptances

After reading all the posts, I would like to make a suggestion that may seem a little indefinite but could have a practical impact.

At least for critical positions, once an offer is sent to a candidate and they accept it, make it a rule that after acceptance, they should submit their last and latest degree certificate in the original. As rightly suggested by Jyoti and Vineet Deshmukh, give them a certain time limit to accept the offer. Those who are serious and have made up their minds to join will accept the offer and condition. Also, state in the same clause that if the person does not join, their original certificate will be returned to them after the next three months (don't make it too complicated). Job hoppers may not juggle with this and take the trouble of the long process of submitting and regaining their certificate, and naturally, keep themselves out of this.

Similarly, this could be more effective by asking them to submit the original resignation acceptance copy, as indicated in one of the responses above.

The reason is that even at senior levels, I have seen people not join and back out at the eleventh hour. Nevertheless, I also came across a few people who honestly intimate about other offers in the pipeline, thereby requesting an early decision to enable them to make a firm choice.

This may not work 100%, but it could at least stimulate a similar way out.

Regards,

Vaishalee Parkhi

[LinkedIn Profile: Vaishalee Parkhi](https://www.linkedin.com/pub/vaishalee-parkhi/62/9ab/6b0)

Madam Jyoti's point is also implemented in UPSC or staff selection appointments. However, here the issue is that the employer suffers due to last-minute shirking away by the candidate to join, possibly because of various reasons such as haggling with their present boss or having multiple simultaneous job offers. In order to address this problem, especially for middle or senior-level positions where non-joining significantly impacts operations, it is advisable to include an informative note with the offer. This note would make the candidate aware that declining the offer after acceptance could cause damages to the employer as the position would have to remain vacant longer for a new selection and appointment process. The employer may then take appropriate action as necessary.

While asking for a copy of the acceptance of a resignation letter from the candidate's current employer might not guarantee their joining your organization, as they could choose to join elsewhere. Insisting on a resignation letter from your organization may be irrelevant.

Therefore, including the above note in the offer letter for such positions may help resolve the issue, as many candidates may not be aware of the legal implications of declining an offer.

Thank you.

Legal Remedies for Breach of Employment Offer

Civil remedies exist for such breaches. I have already given the following view in one of the earlier threads. If a new company offers you a job and you have communicated acceptance thereof to the employer, then that offer cannot be revoked under Section 5 of the Contract Act. You can seek damages in civil court against the company for revoking the contract.

Since it is settled that general principles of contract are applicable to master and servant relations (vide Shriram Piston and Rings vs. TS Mogha case) decided by Delhi HC in 2012, the breach of contract committed by an employer by not allowing a prospective employee to join renders him liable for damages under Sections 73 and 74 of the Contract Act.

Delhi High Court Case: Shriram Pistons & Rings Ltd. & Anr. vs. Shri T.S. Mokha

In this case, Justice Bhagwati observed that the repudiation effectively terminates the contract and the employee can only claim damages for wrongful breach of the contract.

If the agreement was for a specific period, one can recover damages equivalent to the salary for that period (SS Shetty case decided by the Apex Court) or it depends upon relevant statutory enactments, e.g., Industrial Disputes Act or Shops and Establishment Act of a specific state and terms and conditions of appointment.

Relevant Judgments

In SS Shetty’s case, the Supreme Court held that if the contract of employment was for a specific term, the servant would be entitled to damages, measured prima facie in the salary of which the master had deprived him. The servant would then be entitled to the whole of the salary benefits, etc., which he would have earned had he continued in the employment of the master for the full term of the contract, subject to mitigation of damages by seeking alternative employment.

Delhi High Court Case: S.M. Murray vs. Fenner (India) Ltd.

In this case, the plaintiff was entitled to damages calculated in terms of his salary and other perquisites for the whole period of his employment from the date of wrongful termination of the service agreement.

Public Employment Case: Dr. Samarendra Mohan Mukherjee vs. Indian School Of Mines

The appellant was paid a lump sum amount of Rs. 2 lac by the respondent-ISM towards the cost of litigation as he was wrongly denied appointment as Registrar, ISM.

Statutory Right: Section 5 of the Indian Contract Act, 1872

Section 5 states that a proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. The Supreme Court has confirmed that the statutory right under Section 5 is conferred.

Supreme Court Case: State Of Haryana & Ors vs. M/S Malik Traders

The court held that under Section 5, a proposal may be revoked before the communication of its acceptance is complete. However, if the respondent agreed to keep the bid open for acceptance for a specified period, they could not withdraw the bid before the expiry of that period.

Supreme Court Case: The Union Of India vs. Kishorilal Gupta And Bros

The court stated that though repudiation ends the liability to perform the contract, it does not end the liability to pay damages for any breach of the contract.

Mischief Under Section 425 of the Indian Penal Code

Section 425 defines mischief as causing wrongful loss or damage to any person by injuring any property. A company cannot decline the joining of an employee lightly by getting away with a meager one or two months' salary. It can be argued that it amounts to mischief by causing wrongful loss to the employee.

A good company with several openings could have adjusted the selected person and, in time, transferred them to the desired post. However, many individuals do not even have a single offer.

Thanks

Regards, Sushil

Legal Recourse for Candidate Non-Joining After Offer Acceptance

In the case of a candidate not joining after the written acceptance of an offer letter, can we apply Section 73 of the Indian Contracts Act (1872)?

This position is very crucial for XYZ Company, and this has been communicated to you during the hiring process. If you do not join XYZ Company after accepting the offer, it shall be considered a breach of this offer letter/contract covered under Section 73 of the Indian Contracts Act (1872). In that case, you will be liable to pay 10% of the offered compensation to XYZ Company within 30 days of breaking the contract. Conversely, if the company withdraws the offer accepted by you before your joining, the company is also liable to pay the same amount to you as a penalty within 30 days of withdrawing this offer.

The challenges faced by candidates

It's not just the candidates who put employers in tough situations, but what about when an employer discusses the offer letter with a candidate, collects all the documents, and then never releases the offer letter? After following up, HR representatives even stop picking up calls, lacking the basic courtesy to update the candidate. Do HR professionals even realize the pain a candidate faces due to such unprofessional behavior when they don't bother to provide feedback? Blaming the candidate only is not the right approach. HR professionals are not saints either.