Are Appointment Letter Clauses Enforceable and What If You Face Unjust Termination?

Dear Seniors, I would like to seek your expert opinion on the following:

Appointment Letter Clauses

a) Are appointment letter clauses enforceable in a court of law?

Termination Based on Employer's Discretion

b) Can termination based solely on the employer's discretion be justified? If not, what recourse does an employee have?

Non-Joining After Acceptance

c) If an employee does not join after accepting an offer letter or even an appointment letter, what actions can be taken?

Regards, Parminder

I am not an expert, but I will try to answer your questions. Termination on the mere ground of employer discretion cannot be justified. The termination can be challenged in the labor court. If the employer does not have evidence to prove or justify the termination, the termination will be considered illegal.

If the appointment letter/agreement is duly signed by the employer and accepted by the employee, it is enforceable in the court of law. An offer is given before joining the duty. In the offer letter, mostly the valid date of the offer is mentioned. If the employee does not join, it is his wish, and nothing needs to be done.

Regards,
Rajeev Dixit

Appointment Letter Clauses and Legal Tenability

An appointment letter, the clauses and conditions of which, if accepted by a candidate, is legally tenable. The moment you sign and hand over the duplicate copy of the letter, mentioning that you agree to the terms and conditions, you become a party to the bilateral agreement! Whether the clauses are in accordance with the law or not has to be debated, depending upon the clause itself. Without knowing the conditions, we cannot comment on it here and now.

An appointment letter will not hold any legal value; it is just a mutual understanding between the employee and the company. No agreements are allowed between the employee and the company in terms of employment, as per the abolition of the bond/contract employee. The employer has to treat and work with their employees in accordance with the law of the nation.

Regards.

Appointment Letter as a Contract

An appointment letter accepted by you is a contract between you and your employer. If it contravenes any law, it is superseded by the legal provisions to that effect.

There are legal provisions protecting the category of employees who fall under the category of workmen. This clause is superseded by those provisions in their case.

In the case of employees outside the purview of the definition of workmen, the contract prevails. Generally, the appointment letter has a provision of a notice period. The employer can terminate the services without assigning any reason by giving notice as per the appointment letter, much the same way as you can resign by giving one month's notice without assigning any reason. In the case of non-workmen, parties are treated equally as per contract.

Regards,
B R Grover

Dear Sir, Thank you. Please advise if an employee coming in or out of the purview of workmen does not give one month's notice before leaving the company, can we legally hold his salary as he has signed an appointment letter which includes a clause of a one-month notice period.

Regards, Parminder Singh

An appointment letter outlines the terms and conditions agreed upon by the employer and employee, often referred to as the employment contract. The basic elements involved are offer and acceptance, where together they form the contract. However, if any clause is contrary to provisions made under the law, the contract will be void.

In simpler terms:

Reply to Your Query:

(a) Yes, subject to clauses within the framework of applicable laws.

Query (b): Normally, equal opportunity is given to the employee, meaning the employee can also give notice of termination as per the notice period mentioned in the appointment letter.

Query (c): If an employee does not join even after accepting the offer letter or appointment letter, you cannot take any legal action since they are not in effective employment.

Attribution: https://www.citehr.com/453318-appoin...#ixzz2Mfyy8UJ4

Attribution: https://www.citehr.com/453318-appoin...#ixzz2MfyBjirH

Attribution: https://www.citehr.com/453318-appoin...#ixzz2MfxhWMgq

There are three questions asked, and Mr. Grover has answered most of them well. For more clarity, I am elaborating here.

Categories of Employees in India

There are two categories of employees in any establishment in India:

1. Workmen as defined under the Industrial Disputes Act.
2. Other employees who are not covered under this definition (generally termed as management staff/supervisory staff, etc.).

1. Workmen as defined under the ID Act are covered by the ID Act, Standing Orders Act, and the appointment letter.

2. Other employees will be covered by the terms of appointment and other circulars issued in the organization and are guided by the Indian Contract Act.

Examination of the Three Questions

A) Are appointment letter clauses enforceable in a court of law?

As explained by Mr. Grover, appointment letter clauses are enforceable in a court of law. In the case of workmen, it will be examined by a Labor Court, and the process to approach the Labor Court is through conciliation. In the case of other employees, the remedy has to be obtained through civil suits under the Contract Act.

B) Termination on the mere ground of employer discretion: Can it be justified, and if not, what can an employee do?

Termination at discretion is not legally correct. Termination on grounds of misconduct must be preceded by an enquiry, and principles of natural justice must have been complied with. Termination at the end of probation is legally correct both in respect of workmen and management staff. If a workman is not satisfied with termination, they can approach the conciliation officer under Sec 2(A) of the ID Act and through this process can approach the Labor Court. Other employees not covered under the ID Act can file a suit in the concerned Civil Court. Civil suits take a longer duration, but there is no other option available. Employees of Public Sector undertakings can approach High Courts by a writ, but this recourse is not available for other employees working in the private sector.

C) When an employee does not join after accepting an offer letter or even an appointment letter, can we do anything?

An offer letter and acceptance of an offer technically complete a contract. Unfortunately, most companies mention, "If you do not join on or before (date), this offer stands withdrawn." If this is the clause, then management cannot have any recourse through legal means as the clause clearly states that non-compliance will only end in management withdrawing the offer. Alternatively, if management introduces a new clause specifying certain reasonable financial losses, then approaching the court is possible. However, no management generally would like to resort to such clauses as it will not attract new talents even to appear for an interview. Legal clauses do not always help.

Additional Question Raised by the Original Poster

Please advise if an employee coming under the purview of workmen does not give one month's notice before leaving the company, can we legally hold his salary as he has signed an appointment letter which has a clause of one month's notice period.

Holding notice period salary is legally correct for all employees. In respect of workmen covered under the ID Act, companies' certified standing orders will be applicable more than the offer letter/appointment letter. If there are certified Standing Orders, then Model Standing Orders will be applicable, and most of the model standing orders provide for a 15-day notice period. However, kindly check the model standing orders in your State. For other employees, whatever is specified in the offer letter/appointment letter/or any subsequent circular which has been duly acknowledged by the employees will be applicable, and it is legal to hold/deduct notice period salary from final dues payable.

Regards.

Enforceability of Appointment Letter Clauses

Yes, clauses mentioned on the company's letterhead in the appointment letter can be enforceable in a court of law.

Termination Clauses in Appointment Letters

Termination clauses are mentioned in the appointment letter, and any employee should be aware of these clauses. These clauses are applicable to both the employee and the employer.

Consequences of Not Joining After Offer Acceptance

If any employee does not join the job after accepting the offer letter, there is no punishment for him or her.

With regards,
Meenu Singh

Enforceability of Appointment Letter Clauses

Appointment letter clauses are enforceable to the extent that they do not violate statutory laws, such as Acts, Rules, or Ordinances. Please let me know if you need any further assistance.

Regards

Thank you very much for the valuable guidance on this post. Currently, I am facing a situation where the comments on this post are providing me with guidance.

Request for Legal Citations

Mr. T. Sivasankaran, specifically in your comment "Termination on discretion is not legally correct," even for other employees (i.e., not workmen)... Could you kindly provide some citations for me to study and understand this legal standpoint more clearly?

There are quite a few misconceptions on this issue. Before you ask any question on termination, you have to determine whether the employee concerned is a workman or not as defined under the Industrial Disputes Act. Secondly, whether the person concerned is a factory worker or an employee in a shop or commercial establishment as defined under the Shops & Establishment Act.

For non-workmen, an employment letter signed by both parties is a sound contract, and the contract is complete when both parties have signed. Its applicability starts thereon. If the employee does not join on the due date, it is a violation of the contract. Normally, there is no notice period during probation, and hence, the employee not joining amounts to termination of the contract without notice. However, in the case of senior employees, some organizations have a notice period right from the beginning. In such cases, your not joining the organization technically amounts to a violation of the contract, and if the company goes to court, the person will be liable to pay for the notice period. Unfortunately, companies do not bother, and an impression has been created that if the employee does not join, no action can be taken. This is not correct. I know of cases where an employer, due to a change of circumstances, informed the candidate not to join and paid for the notice period.

Understanding Discretion in Employment Decisions

Normally, it is understood that "discretion" means his desire/whim/fancy; no, it is not correct. There are quite a few judgments which say "Discretion means judicious discretion," i.e., it should be reasonable and explainable. Discretion means a decision which can be arrived at by a reasonable person. It comes to help only where two decisions can be reasonably held.

There are certain laws which apply to all persons whether worker, non-worker, workmen, or non-workmen.

In my organization, neither an appointment letter is given nor is there any certified standing order. The total number of employees is more than 150, yet the organization has not obtained a certified standing order. Now, the management wants to terminate an employee who has not completed 240 days so far. However, as there is no appointment letter and no certified standing order, can the employee be terminated or not? If we terminate him without reason, how much compensation would be given to that person.

Thank you.

I recently joined a company last month. At the time of joining, they asked me to sign about 150 pages of joining documents, which included the NDA, policies, appointment letter, etc. I requested a copy, and they told me I would receive it after the signatures of the concerned person. Immediately after my joining, I discovered that this company is fraudulent and keeps a majority of female employees to take undue advantage of them in various ways. As an HR person, I learned about many instances where employees were being harassed in different ways. Unfortunately, within HR itself, there were three exits within 20 days. I was also harassed and tormented by senior management. When I refused their unwanted demands, they made my life miserable by sending numerous harassing emails. However, when I showed my willingness to resign, they asked me to give them a couple of days. Finally, using their old trick, they are asking me to travel to Vizag, which is suspected to be a cyclonic location, without a return date. I have heard from other employees that they send people like this and don't pay the salary or reimbursements, and moreover, ask them to do inappropriate things. I never wanted to go; hence, I wrote an email stating that since I am staying alone with my two school-going kids, I can't go. But if they still want, they can terminate my services as per the contract. Now they have sent me a legal notice saying that either I give them two months' salary, or I have to go to the location. I can't deny it. I am completely in a mess. Please suggest. I was getting a salary of Rs. 1.25 per month.