Navigating Job Offer Rescission: What Should Employees and Employers Do?

Employee Offer and Resignation Dilemma

Suppose we select an employee to join our organization and give him an offer letter or appointment letter. The employee informs us that he will join our organization after one month due to the notice period of his current company. After 10 days, our management decides that we no longer need this employee. On the other hand, the employee has already resigned from his current esteemed company because of the new opportunity. As an employee, what should he do in this case? Also, as an employer, can we take this type of action against an employee?

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Moreover, when we inform an employee that we no longer need him and suggest he find another job or rejoin his previous company, what types of actions can the employee take against the management of the new offering company?

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After arguments with the employee, the new offering company is ready to let him join, but informs him that after one month, he will be terminated from our esteemed organization. In this case, what should the employee do?

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Offer and Acceptance in Employment Contracts

Offer and acceptance constitute a contract. Unilateral termination before the employee joins is illegal, and the person can sue the company for compensation. However, it takes time, and the quantum cannot be defined. The person can even sue for damages and mental agony, and they are sure to win.

The company can hire the employee and terminate them upon the expiry of the probation period. It is not only unethical but also illegal to inform the person that their services will be terminated after one month. The remedy lies in the Indian Contract Act.

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Appointment Letter vs. Offer Letter: A Discussion

How can you provide an appointment letter until the employee joins? Kindly change your rules. As per the rules, you can only provide an offer letter that you can terminate or cancel, but after providing the appointment, you cannot do it. However, management in a private firm can do anything. Even my company does the same thing. I faced a very embarrassing situation in front of those employees, but we provide only an offer letter, so we are safe. Change your rules; don't give an appointment letter until the employee joins.

When an offer is made by the company and the person to be engaged signs and returns the offer letter, the contract starts. If the person does not join by the stipulated time, then you can say the contract is not in vogue. The terms "appointment letter" and "offer letters" are not understood correctly. Just because one company issues an appointment letter at the time of joining, it does not mean there is no contract. In my career, I actually stopped issuing appointment letters. I used to make the offer letter elaborate so that there is no ambiguity.

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Understanding Contracts Beyond Appointment Letters

Every person who thinks a contract is only one that comes with an appointment letter should realize that even verbal communication, email correspondence, and all forms of communication are maintainable under the law as "contracts." The typical appointment letter or the Employee handbook is just a formal document that sets a base. But any contraventions, allowed by the management or through mutual consent, apply to both parties as a contract.

Offer Letter vs. Appointment Letter

The letter issued is an offer letter, not an appointment letter. An offer is a contract and an assurance to both the employee and the employer. The employer must consider carefully before issuing the offer letter.

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