Relocated for a Job That Fell Through: Should I Take Legal Action Against the Company?

Hi, I appreciate your advice on my issue below. I received an offer from a company asking me to join on a specific day as stated in my offer letter. Consequently, I relocated my family, belongings, household items, and car to the new job location. However, just the evening before the joining date, I received a call from HR informing me that the project had been canceled and advising me not to proceed with joining. Subsequently, I discovered from employees of the company that the project had actually been discontinued long before, yet they still issued me an offer letter to join. Due to this offer, I had to turn down several other job offers. I invested a significant amount of money and physical effort into shifting my residence to the new location. I would appreciate your advice on this matter as I am considering taking this issue to the labor court. Thank you for your assistance.

This is more of a civil court issue than a labor court issue. You can hire a good lawyer and sue them, provided you have documentary evidence such as their offer letter, the change of job from your earlier company, etc. Have you obtained a copy of your acceptance letter and proof of dispatch to the company accepting the job?

Dear Kumar, what has happened to you is unfortunate. The company should have been thoughtful while bringing a new person on board. By withdrawing their offer of employment, they have left you in a lurch. This smacks of insensitivity on the part of the employer.

As Mr. Nathrao has said, your case cannot fall under the purview of labor laws as the employer-employee relationship did not take shape. You were not an employee of the company.

Nevertheless, whether this case can come under the purview of the Indian Contract Act, 1872, is a moot point. An appointment letter is a contract between an employer and an employee. Can an Offer Letter also become a contract? Maybe or maybe not. It all depends on how the court interprets the law. Occasionally, courts have upheld oral contracts as well.

You may find a suitable lawyer who handles cases under the ICA and seek their advice. If you file a suit against the company, you may claim transportation charges and loss of pay caused due to your resignation from the previous company.

It appears that you had shown eagerness in moving your family well before employment. You could have settled into the new job, and after 2-3 months, you could have moved your family and household belongings.

Thanks,

Dinesh Divekar

I thank Shri Dinesh Divekarji for his timely advice, especially for the new joiners who may even try to take the trouble of shifting their family, house, etc., disturbing all to rush to join the new company upon receiving an offer letter. It is good advice for job seekers to be cautious while joining new companies and not to shift their family before assessing everything at the new place. The company is also at fault for not informing outstation candidates regarding such changes. This emphasizes the need for transparent communication from both the company's side and the candidate's side. This ugly situation could have been avoided if the company had a good onboarding policy where the company assigns an HR person to assist the new employee with all aspects, including finding a house, transportation, etc., to make the shifting and joining process smooth.

Regards, c.neyimkhan

Handling Offer Rescission: A Case Study

I have had to handle a similar situation in one of my previous companies. We had issued offer letters to a few individuals. Just before they could join, a recession set in, and orders started getting canceled. We had to prepare ourselves for a grim future ahead, hoping for the economic climate to ease.

The issue revolved around those who were expected to join us in 15 days to a month. We sought legal advice, and a top lawyer informed us that our liability was limited to the notice period salary and not a penny more. However, as a responsible employer with a brand to protect, we decided to take further action. We called each of the employees and met them personally to explain the situation. We requested them to consider staying back in their current organization. Out of the 7 employees, 4 chose to stay, while 3 could not. According to our contract terms, we had a 2-month notice period. We made the decision to pay them double the notice period, providing them with 4 months' notice period salary. Fortunately, we were able to recruit all 7 individuals within about 4 months.

This incident significantly impacted our employer brand, highlighting our commitment to good HR practices. The positive message spread throughout our employee base and among potential hires, resulting in higher employee engagement.

There are HR professionals who align closely with business heads and fail to recognize the importance of the employer brand. It is the duty of HR to assist management in understanding the value of investing in HR and distinguishing it from a mere expense.

The more I come across posts of this nature, the more saddened I feel about employers turning into sweatshops and overlooking the crucial role of HR as a pillar of any organization.

Regards

Thanks a lot, friends, for the very useful comments. Yes, as you said, I'm not supposed to take my family with me, but my situation is like this: I have to put my daughter in school (LKG) because of this offer, so I put her in Chennai for schooling. I don't have time to wait for a few months.

Wonderful job you guys did for those three guys, paying their notice at least. Yes, the same I asked of these guys too, just one month's salary. If they refuse to pay that, then they will regret their mistakes.

HR said the company lost that project. Their COO says this project is for Bangalore, so how come you got a joining place in Chennai? Also, she mentioned that some huge miscommunication happened. :-) What a joke.

I have everything with me as proof. Let me make sure they will never do this to anyone in the future.

Thanks again for all your advice. Cheers