Appointment Letter Dilemma: Are Candidates Bound by Company Rules Without Signing?

Hi Friends, if a candidate does not sign the appointment letter, are they still liable to abide by or bound to the rules or policies of an organization? Kindly advise.

Thanks,
Anamika Mitra

You raised a very important query. The appointment letter follows the offer letter. It contains the terms and conditions of the company that are applicable to the employees.

However, it may be possible that the organization deviates from the terms and conditions agreed upon with the concerned individual. If all negotiations and conditions are fair and clear to the employee, they must sign the official document. Refusal to sign would be considered misconduct on their part, for which the company can take action.

Furthermore, despite the refusal to sign the appointment letter, all conditions shall remain applicable as mentioned in your Certified Standing Orders of the company.

Regards,
Ramesh Bhardwaj

Issuing the Appointment Letter

First, it's a good idea to give the appointment letter on the joining date and not delay it for a later period. If the employee refuses to sign the appointment letter (and there is no deviation from the offer letter), the employment must be terminated immediately.

However, the question then arises as to whether you gave him a letter, or you did not give the letter (and therefore he didn't sign), or whether you gave it, he didn't bother to sign and return but didn't specifically state that he would not sign or that he has any objection to the points. Again, there would be a difference if he has not even signed the offer letter. So, please clarify which is the correct situation here.

Perhaps my views differ a little from the earlier suggestions. In my opinion, if your company is registered under the Factories Act/Companies Act, then there must be its own Certified Standing Orders or it must be following Model Standing Orders, as the case may be. These Standing Orders contain the do's and don'ts for each and every employee employed in the company to which they apply. In some companies, there is a separate set of rules for executives, which they call Conduct, Discipline, and Appeal (CDA) Rules.

Once an individual has accepted the offer of appointment, it is deemed that they have accepted and agreed to the terms and conditions of employment as well, whether or not they have separately signed a document of acceptance. There is one line given in the appointment letters that "accepting the offer of appointment shall mean that you accept the terms and conditions of employment and shall abide by them." Even if this line is not there, joining after the offer of appointment means the same. I strongly recommend making a mention of this statement in future offers if it is not being done at present.

Regards,
AK Jain

If he is a workman and has joined the company without signing the appointment letter, it can be inferred that he has implicitly agreed to abide by the standing orders/service rules of the company. If he is a non-workman, he has implicitly agreed to abide by the service rules of the company, since he cannot plead ignorance of rules that are currently governing the service conditions of non-workmen in the company.

Potential Issues with Lack of Standing Orders

However, a problem may arise when there do not exist standing orders or service rules and one's service conditions are governed by the terms of the appointment letter only. Then the question is what governs his service conditions. For example, you want to transfer him to a different section or unit located at a different place and he opposes it. You may face a problem of enforcing the transfer. In that event, it is advisable to give him a letter spelling out the terms and conditions that are applicable to him with immediate effect under his acknowledgment. He will be bound by those terms from that day at least. This is one option open to you.

Regards,
B. Saikumar