Can a Company Take Action if a New Hire Backs Out After Signing the Appointment Letter?

Dear All,

I would like to have your view on my following query: If a prospective employee signs the appointment letter of the organization and denies the offer, does the company have any hold on the individual?

Per my understanding, signing an employment letter/appointment letter makes the individual fall into company norms, and he/she becomes an employee from the effective date of joining as mentioned in the document.

Is my perception right? If yes, then what measures can the company take on such individuals?

Regards,
Veena

You are right. An appointment letter is confirmation of employment and that the individual is an employee of the company. He/she has to follow the rules and regulations as set by the company, and the terms and conditions mentioned in the letter are applicable to him/her.

A candidate, after signing the appointment letter, cannot refuse the offer letter. An offer letter can be defined as an offer of employment made to a prospective candidate by the company. If the candidate has to refuse the offer letter, he/she should do so before joining the company.

Hope it helps

But what if the candidate is made to sign the appointment letter with the joining date set after one month? Does he still have to follow the rules? In this scenario, the candidate has not yet joined, but the offer was given, and he was asked to sign as an acknowledgment.

Regards,
Krishna

Appointment letters should be given on the date of joining and not before that. The individual will become an employee as soon as he/she signs the appointment letter. However, if the individual is on a probationary period and it is specified that during this period, either party can terminate the employer-employee relationship without prior notice, then the new employee can leave the office even after spending just one day in the company by simply submitting their resignation. In this scenario, you will not have any hold over that individual. I hope this clarification is clear.

Regards,
Abhishek

As rightly pointed out by Abhishek, an appointment letter cannot and SHOULD NOT be issued before the candidate joins the company. If the candidate has not joined the company, then he has every right to decline the offer.

Hope it helps.