Can My Future Employer Back Out of a Job Offer and What Are My Legal Options?

Hi, I wanted to know from an employee perspective. Currently, I am working as a software engineer in an MNC. Recently, I resigned from my current organization after receiving a "letter of Appointment" from another MNC. I sent an email to my future employer's HR, mentioning that I am accepting this offer and I will be joining on a certain date. I also received confirmation from their side.

Question on Offer Rejection and Legal Action

So my question is, "Is there any chance that my future employer could reject the offer given?" If rejected, is there any possibility that I can take any legal action against the employer?

Thanks in advance.

Regards,
Sagar

It is my personal view. Ideally, it should not happen, but sometimes it may occur that your future employer might put the position on hold for any reason. They may not need your services, or they may have found someone who is ready to join the same profile at a lesser salary, etc.

Regards,
Monica

Legal Implications of Not Receiving an Appointment Letter

It may happen that you will not have any legal case to make if you have not been given the appointment letter. I am saying this as a layman. Also, they could take you on and make the position redundant while you are still on probation. However, these occurrences do not happen on a large scale.

Unless and until you receive an offer letter on the letterhead of the new company, you cannot consider that you have been offered a job. If you have received the aforementioned letter from the company, then yes, you can take legal action against them. If not, forget about the company and look for other options. Any other communication is null and void and will not stand in a court of law.

Regards,
Mahendra

As rightly said by Simhan, even if you take any legal step, they might hire you for a month or two and then fire you without any notice, as you will be on probation.

Legal Rights Regarding Job Offers

In any company, recruitment is done based on manpower requirements. If you have been selected for a particular post in any company and they have issued an offer letter to you, then ethically they cannot reject the offer they have made. If they do, you have the right to take legal action against them based on the offer letter they have issued.

Whatever the experts are giving their opinion on is true. However, try to find out on what grounds they are rejecting your employment. Maybe they have checked your credentials with the previous employer or received some adverse information about you. On that basis, they can refuse your appointment. However, they have to convey it either in writing or verbally. Otherwise, you cannot take any legal action against them. They can give any random reason. So, the best way is to look for another opportunity. Being a technically qualified person, you will definitely get a job elsewhere.

All the Best.

Regards,
Deepak M.

Have you read the responses given so far? After some experts differed with my view, I checked the web and found this link https://www.gov.uk/job-offers-your-rights. If you mention what type of offer is given, then one can give a precise answer.

More at https://www.google.co.uk/#q=can+a+jo...r+be+retracted.

Legal Considerations for Employment Offers

In my view, legally there is no scope to fight against the company. It depends upon the terms and conditions of the company when issuing the appointment letter. Another important aspect is the probationary period. During this period, the company may terminate any employee, as agreed upon by the employee at the time of joining the company.

It happens sometimes due to various reasons. Just take a look at your appointment letter, which was issued to you and which you had accepted. If it is on letterhead, you can proceed in a legal manner. Alternatively, you can opt for communication via email from the company's official HR email ID. However, if you don't receive a response, the company may feel guilty but still choose to let you go, as all senior employees are informing you. During the probation period, the company has the right to terminate any employee, so they might do it later, leaving you in a helpless situation. Therefore, it is advisable that if you have any doubts, you should start exploring alternative options.

Please let me know if you need further assistance.

Best regards

Nobody can assure that something will happen and something will not happen. There are all possibilities since a contract of employment is a slippery wicket. As far as the legality of the issue is concerned, I may say that the law is a double-edged weapon. If you consult a lawyer, one may cite one hundred reasons as to why legal action is possible, and another can cite an equal number of reasons as to why legal action is not possible. Therefore, a prudent thing can be to contact the future employer and ask him whether there are any possibilities that the post will be on hold. Inform him that you are resigning from the previous job in the hope of joining the new job, and thus, you will be taking a risk if the post is kept on hold or disbanded. Get things cleared from the employer himself.

Regards,
B. Saikumar

Have you already signed the employment contract? If yes, legal action could start in the event of rejection taken by the employer.

You should not take legal action. Please note that by giving an Offer Letter, it does not guarantee offering or giving a job to a candidate. Depending on conditions related to work/projects and the company's financial situation, your offer may also be rescinded. As a skilled technical professional, it would be better for you to search for another job. Maintain your confidence and continue working hard.

All the best.

Regards,
BGK Murthy
Hyderabad

First of all, don't be negative. This happens in very, very rare cases because of numerous sudden changes. Well, if you are wondering, "if it happens," then what? Employers often provide a "Letter of Offer" and a "Letter of Intent," both of which are considered an "Offer Letter," but there is a significant difference between them. A "Letter of Offer" may lead to legal complications, while a "Letter of Intent" is not legally binding.

If an employer rescinds the offer given to an employee before their commencement, it may result in legal action. Even if the employer hires the employee reluctantly to avoid complications, it may not fulfill the employee's goals, as the employer could terminate the employee during the probation period.

It is essential to investigate everything about the company before accepting the offer letter, just as the employer investigates the employee before and after extending an offer of employment.

Regards,
Chill HR

Let me address this issue legally.

Understanding the Indian Contract Act

This issue falls under the Indian Contract Act. When an offer is made and accepted, and such acceptance is communicated to the other party, it automatically becomes an agreement. In the case above, one party has already acted upon it as he must have resigned from his first company.

Revocation of Offers and Acceptances

According to Section 5 of the Indian Contract Act, an offer may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. The section is reproduced below:

"5. Revocation of proposals and acceptances. - A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards.

An acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards."

So once you accepted their offer and communicated its acceptance to them, they are bound by the agreement. All you have to do is to formally accept it by any means like by email, post, or personally, but I would recommend a written acceptance like an email or post.

Legal Recourse Under The Specific Relief Act

If somebody revokes the offer at the time of joining, they can be dragged to court under The Specific Relief Act for non-performance of the contract, and the agreement may be enforced specifically.

Concerns About Termination After Joining

In my opinion, it is not a cakewalk to play with someone's career. Don't worry, legally, a lot can be done. As far as the question of letting you join and terminating afterwards is concerned, they have to show your underperformance, and you can challenge that in the Labour Court. However, action speaks louder than words; if a person performs well, the company never thinks of terminating him. So don't worry and proceed with your career.

Feel free to revert in case any clarification is needed.

Legal Implications of Offer Withdrawal

There are known instances where, due to compelling circumstances, an organization had to withdraw the offer of appointment. While any legal action in the matter is not commonly heard of, since there is a unilateral revocation of the contract, speaking in legal terms from the perspective of the Contract Act 1872, such a revocation is considered improper and is accordingly actionable. All direct losses caused due to such revocation are payable by the organization.

Regards,
KK

I feel one may be treading a grey area if one contemplates action on the basis of acceptance of a mere offer of employment and whether one can enforce specific performance of a contract of service under civil jurisdiction. It needs some further inquiry and analysis.

Regards,
B. Saikumar

Dear Saikumar,

The Law of Contract states that if a party acts upon the representation/offer/proposal of the other party and the other party revokes such representation/offer/proposal, causing the first party to incur losses, the party revoking the offer must compensate the party who suffered losses.

In a scenario where an employee receives an offer from a company, resigns from their current job, and is subsequently informed by the company that the offer is no longer valid, the employee is left jobless due to circumstances beyond their control.

Similarly, when you enter a restaurant, place an order, and the order is prepared, you cannot cancel the order and leave without paying. This principle applies universally and is relevant in this situation as well. While this issue is primarily civil in nature, it can be resolved with the assistance of the right legal representation. Matters like these can indeed be specifically enforced.

Sincerely,

Thank you for clarifying the matter. I have some apprehensions. Does this mean he can also claim damages for loss of job? I strongly feel that employees who act on offers and then resign from jobs based on such promises/offers, which are later withheld, should have an effective and expeditious remedy for justice. Of course, as you mentioned, a good advocate can make a case.

Regards,
B. Saikumar

While the two law professionals fight it out in this court of HR professionals... :-), let me meanwhile tell you what can happen from an HR perspective. You have accepted their offer and have given (read communicated a joining date), and they have confirmed this as well via email. You have also simultaneously, after receiving their confirmation, started your exit formalities in the current organization. No organization will stop your joining unless of some very drastic conditions...

1. The company is going bankrupt or stopping operations.
2. Your background check and verification have come back negative.

These are the only two reasons why a company will stop a candidate from joining after completing exit formalities. In either of the two cases, you don't stand a chance in the court of law, irrespective of what the law experts tell you.

If any company does it for any other reason apart from the above two, you will have full right with a strong case to take legal action (that's a different debate on how long it will take you to get a decision and what impact it will have on your career). But remember, a company will always be stronger than you, and you will have to have a rather clean record (professionally and documentation-wise) to stand a chance to win this case. In my 22 years in HR, I do not remember a single resume that does not have false information that I can use in the court of law to prove a candidate lied... :-) and especially in IT... So whatever you do, choose wisely.

For everyone else, it is but just another case/incident. For you, it is your LIFE, and life is always about the choices you make... :-)

Cheers.

Thank you all for your replies and suggestions. I apologize for being on a long vacation. Now, I will try to answer all of your questions.

@Mahindra: I have received the "Letter of Appointment" from the employer.

@Deepak: They are now stating that my notice period is much longer (3 months), and they require you to join in a month. However, before accepting their offer, I clearly mentioned my notice period, and I even received a confirmation email for it.

@Simhan: I have received the "Letter of Appointment" from the employer.

For everyone, I have emails from the employers stating that they are okay with my 3-month notice period. It was only after receiving this confirmation that I resigned from my current organization.

Regards,
Sagar

First and foremost, I am quite surprised that they gave you a letter of appointment and not an offer letter. This, in my opinion, is a huge mistake they have made. Please look at the letter of appointment. It will clearly mention your expected joining date. Could you tell me what date is mentioned in the appointment letter?

If there is no date mentioned, then my friend, you definitely have a strong case.

A 3-month notice period is generally a retention strategy. Most organizations allow you to buy out the 2 months' notice and serve one month. If the new employer wants you to join in one month's time, then they will have to buy out your 2 months from your current employer. They will be required to pay the two months' notice that they want you to forego. You will be required to pay and then have the full amount reimbursed by the new employer.

Please have your discussion with your new employer in this regard, but before that, check the expected date of joining in the appointment letter.

Cheers,

Navneet

In the letter of appointment, it is mentioned as September. However, I replied to them stating that it is not possible for me to join in September since I have a 3-month notice period that cannot be bought out. In response, they accepted my decision via email and also initiated my background verification and other formalities. In my current organization, it is also not feasible to buy out the notice period.

Regards,
Sagar

Could you please tell us "exactly" what you had written and what was the reply with reference to your inability to join in September? Exact wordings, please. It will help us understand what is happening much better. FYI, I'm trying to negate the "miscommunication" angle in this case.

Thanks,
Navneet