Job Offer Withdrawn Last Minute: What Should I Do After Leaving My Old Job?

Hi, I need help from the experts here. I was offered a job as Assistant General Manager with a reputed company in April. My joining was supposed to be on the 11th of June. I accepted that offer. However, on the 8th of June (Friday, Saturday, and Sunday being off), I received an email from the Chief Manager HR of the company stating that my joining has been delayed. Interestingly, on the 8th itself around 3 PM, a junior HR executive emailed me and asked me to be there on the 11th for joining by 10 AM. After speaking with them face to face, they cited reasons that the position does not exist now and they need some time to come back to me. What do I need to do, as I have left the old organization and they have recruited new manpower for my position.

Regards

The contract is complete when they have offered, and you have accepted the offer. Breach of contract exists as per the details given. Probably, you need to visit the company, meet higher-ups, and find out the exact position. You can explain to them that the old job has been given based on this offer and acceptance. Legal action may be considered if found necessary by a local lawyer after going through all paperwork, emails on the subject.

Understanding Job Offers and Contracts

A job offer is the expression of interest by the company to a candidate to communicate its intention to enter into a contract of employment. It is not the contract itself. The offer becomes a contract of employment when the candidate joins the company and agrees to the terms and conditions of employment by signing the duplicate copy of the said letter.

Similarly, many candidates do not join the company even after accepting the offer of employment; this is not a breach of contract. The offer can be withdrawn at any time before joining. If the withdrawal is so late that it causes a loss to the candidate, then the company can be sued in a court of law.

Warm Regards,

Bharat Gera HR Consultant [Phone Number Removed For Privacy-Reasons]

Dear GeraJi, your point is valid to the extent of procedure. But here, the job offer has been accepted and a date of joining given. Now, the withdrawal of the offer is a breach of contract. To my mind, the company made an offer to X, and X has sent his acceptance as per the prescribed date. That completes the chain of action to become an accepted contract. This is how I understand the issue in question.

Section 5 of the Indian Contract Act, 1872

"A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. —A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards."

The job offer, once accepted, becomes a basic legal contract between you and your new employer, and when your employer withdraws that offer, it falls under ‘Breach of Contract’. In normal circumstances, the contract once made cannot be unilaterally revoked. Only both parties to the contract can discharge each other from obligation by novation/accord and satisfaction. "Acceptance and intimation of acceptance of offer are therefore both necessary to result in a binding contract."

Job Offer Withdrawal and Breach of Contract

The fact is that Xco offered a job to A, which has been accepted by A as per the conditions of the offer. Joining the job on the fixed date is one of the conditions, which in itself forms a binding contract between Xco and A. The withdrawal or cancellation of the offer would constitute a breach of the contract, in the absence of a clause granting Xco the liberty to cancel the offer.

It is widely acknowledged that the position of Assistant General Manager is typically not offered to a fresher. One must realize that in order to join a new job, the candidate would have had to leave the old job with a notice period. The current situation of the candidate is jobless, as they have already resigned from their old job to join the new one.

In my opinion, the candidate should consider suing the company for breach of contract and trust after verifying his documents with a lawyer's assistance. Consulting a lawyer would be necessary to determine the next course of action.

Kind regards,
[Your Name]

Many offers mention the fact that the offer can be withdrawn at any time. Such offers need to be rejected out of hand.

People have to leave jobs to get another job, and whims and fancies of employers are not acceptable.

I endorse the views of Nathrao Sir that by accepting the offer of appointment without any condition, a contract has come into vogue, and the recruitee has a right to sue the employer for breach of contract. However, this type of litigation has not been widely reported. A claim could lie for damages and mesne profit.

Dear HR friends,

Job Offers and Withdrawal Clauses

Have you come across any company's job offer that says, "the company reserves the right to withdraw the offer before the candidate joins the company"? Fortunately, I have not yet encountered such a company. I find it hard to believe that any right-thinking HR manager would insert such a clause in the offer. I also find it hard to believe that any right-thinking professional would accept such an offer.

Once the job offer is made and the candidate's acceptance is communicated, the contract is complete. It is not correct to say that the employer has the right to withdraw the offer anytime until the candidate joins, even when he/she has communicated acceptance of the offer. It would be a mockery of justice, equity, and good conscience if employers were to have a legal right to do such a thing.

Candidates Not Joining After Acceptance

Of course, it is true that sometimes candidates accept job offers but do not show up to join. Our legal system being what it is, employers do not sue such candidates for damages. However, I think it could serve as some kind of deterrent to mention in the job offer that after accepting the offer, if the candidate fails to join, he/she will be liable to pay the employer damages of Rs....

Some candidates might still breach the contract, but it is likely to act as a deterrent for most candidates.

This thought has come to me as I was typing this post. I would like to get the views of fellow professionals.

Regards,
Ravindra Pandit

Legal Implications of Revoking a Job Offer

If an employer makes an offer to a prospective candidate, deeming them fit for the position, and the candidate accepts the offer, this often leads to the candidate resigning from their current role. Revoking the offer without mutual consent from either the candidate or the employer constitutes a breach of contract, and either party can sue for damages incurred as a result.

Employers rarely sue candidates for not fulfilling their part of the deal if they back out at the last moment, primarily to avoid increasing the workload on their legal team. However, in certain cases, they do pursue legal action. It is important for the candidate to consider legal action if higher authorities fail to provide a solution.

The employer, however, can also consider the option of paying the salary in lieu of not allowing the candidate to serve the notice period, especially if the candidate had joined the services and was asked to leave on the very first day of employment.

Update on Job Offer Situation

Thanks to all the members for helping. Now the situation has an update. I had sent them a legal notice and asked for compensation. The Chief HR of that company called back and said that the project is back on track, and they want to have me on board. Previously, she had emailed me that due to an adverse reference check, they were withdrawing their offer. When I asked her about my adverse reference check, she said that since she was not in a position to comment on the exact time the project would restart, she had no other option.

What I assume is that they will bring me on board, and after a few days, they will terminate me citing non-performance as the reason. In that case, I will not have any options left. Should I simply ask for compensation as their actions have resulted in my job loss, and I am not yet employed again? Should I ask for a new offer letter with no termination bond of a minimum of 6 months? Please guide...

It is neither ethical nor can the company do it. Based on the offer, the prospect would have resigned or planned to join the organization, resulting in an unforeseen loss for him. This could lead to legal action if he desires to pursue it through court proceedings.

Regards,
Piyush

You will have to take a call. They have again offered a position to you and you need to seek clarifications on the longevity of the position. Verbal discussions will help you to judge whether it is a smokescreen to avoid legal action. Ask them the nature of the project and whether it suits your qualifications and field of expertise. You would be in a position to judge by asking a few strategic questions. Take care and decide.

Understanding the Indian Contract Act, 1872

Under the Indian Contract Act, 1872, a valid contract has three components: (1) offer, (2) acceptance, and (3) consideration. I think the third part (consideration) is missing in this case. So if the offer is withdrawn by the employer, the party who accepted the offer (employee) might suffer losses and may feel like knocking on the door of the court.

Considering the Employer's Perspective

Now, take the other side also. After entering into this contract—which is devoid of consideration, i.e., the 3rd element—if the employee does not join, will the employer not suffer losses? Definitely, he will. Will he also not feel like knocking on the door of the court?

Conclusion: When is a Contract Truly Formed?

Therefore, to my mind, the real contract would be clinched when the employee joins the employer. Further terms and conditions of service are signed between the parties.

You have raised a very interesting point. In continuation of this thread, a question comes to my mind. Suppose 'A' makes an offer to buy property from 'B' for a consideration of Rs. 50 Lakhs. 'B' accepts the offer. The parties agree to carry out the transaction/registration one month later. Do we have all three essential elements of a valid contract here? The money transaction has not actually taken place, but the offer and its acceptance are there, as well as a clear understanding of consideration. Now, suppose 'A' withdraws the offer after 29 days. In the meanwhile, 'B' has turned down several lucrative offers from other parties. The withdrawal of the offer by 'A' is going to cause financial loss to 'B'. Will 'B' be entitled to sue 'A' in this case?

Is it a condition precedent that the 'consideration' should actually be passed on before the contract is deemed valid? Or is the mention of consideration made with the intent to distinguish commercial deals from promises of charity? Obviously, charity would not come under the purview of the Contracts Act since there is no consideration, and so a promise to make charity would not be contractually enforceable. If a contract were to be considered valid only after the consideration amount is paid, most contracts would become defunct because the consideration is generally parted with in stages as the execution of the contractual terms progresses. Does the Contracts Act specify how much (percentage) of the consideration should change hands before the contract is considered valid and enforceable? In the absence of such a provision, it should logically be sufficient if the consideration amount (reasonable) is agreed upon by the parties, even if no amount has actually been paid. So long as the offer and acceptance fall into the 'commercial' transaction category, I would like to believe that a clear mention of the consideration amount should be sufficient to give it the shape of a valid contract. In the absence of a clause giving a right to either or both parties to revoke the contract midway, I believe it should be considered an irrevocable contract. I would like to be corrected if this opinion is not in line with what the law says or intends.

Similarly, in the case of a job appointment, there are three elements: offer, acceptance, and mention of salary (consideration). Based on this confirmed (duly offered and accepted) appointment letter, the prospective employee leaves his current job. Subsequently, if the offer is withdrawn, the employee would have already left his existing job and therefore would be subjected to a tangible loss until he finds an alternative, comparable occupation. It would be a mockery of justice if the law becomes helpless in such circumstances. Specific relief must be given to the affected party.

Of course, very rarely would an employer breach a contract, while prospective employees seem to do this more often and blatantly. In either of such cases, justice should be done by making the defaulter pay liquidated damages. Unfortunately, our judicial system is so sluggish that people don't even think of knocking on the doors of court. If the 'Durbar' system of dispensing quick justice were still in place, perhaps the situation would have been different!

Regards, Ravindra Pandit

Legal Position on Sale-Purchase Agreements

Although I am not a practicing lawyer, I feel that the legal position would be somewhat like this: If you have ever witnessed a sale-purchase transaction of a property, like the example you have quoted, you may know that simultaneously the parties also enter into an 'Agreement to Sell,' and the purchaser also makes a part payment (consideration) of the agreed amount to the seller. In such agreements, the total consideration price (total cost) is written, which the purchaser would pay to the seller. Usually, it is also agreed between the parties that the seller will sell to the purchaser for the agreed amount, but if he fails to do so, he will return double the amount (consideration) that has been advanced to him. Also, if the purchaser fails to pay the balance amount within the stipulated time, his partial payment made would be forfeited by the seller.

Situations Under Sale-Purchase Agreement

1. If the seller revokes the agreement or fails to appear before the Registrar for the transfer of property when the purchaser marks his presence there along with the balance amount, the seller would be liable to pay double the amount he has already received from the purchaser. If the seller fails to pay back, the purchaser will file a suit for recovery as per the terms of the agreement. He will claim this amount under the Indian Contract Act, 1872.

2. If the seller marks his presence before the Registrar for the transfer of property but the purchaser does not appear, or if the purchaser revokes the agreement, the seller will keep the money advanced to him by the purchaser, and the purchaser cannot claim it as per the terms of the agreement.

3. If the seller, after receiving the full amount of money (consideration), does not appear before the Registrar for the transfer of property, the purchaser can file a suit for specific performance under the Specific Relief Act, 1963, and force him to transfer the property to him.

Hence, in these kinds of agreements, the part-payment or full payment is the 'consideration.' As per law, consideration could even be paltry sums, say one penny or one rupee. Such agreements can be legally forced to be performed specifically by the erring party through the court of law in India, i.e., under the provisions of the Specific Relief Act, 1963.

Contracts of Service vs. Sale-Purchase Agreements

However, this is not the situation in cases of contracts of service, i.e., contracts between employer and employee. These kinds of agreements cannot be enforced through courts in view of Section 14(1)(b) of the Specific Relief Act, 1963, according to which a contract, the performance of which involves continuous duty that the court cannot supervise, cannot be enforced. If the employer still forces an employee to work, it will amount to 'bonded labour' under the Bonded Labour System (Abolition) Act, 1976.

Therefore, it seems that an employment contract is a form of contract for personal service, which the courts recognize as expressing the social relationship of employer and employee, as opposed to other relationships, i.e., commercial or any other kind.

Offer Letter vs. Employment Agreement

In the case at hand, it can be presumed that it is simply an 'Offer Letter' as the terms and conditions of service have not been specified. It cannot be termed as an 'Employment Agreement.' It is also presumed that the employer has not yet disclosed all the 'terms and conditions of employment' to the employee in this 'Offer Letter,' as the person who seeks this clarification has not provided any such description.

Hope I have been able to clarify my viewpoint.

Best wishes and regards.

Recruitment and Offer Letter Dynamics

I am sorry, I may differ with dignitaries. Recruitment is primarily based on the necessity of the company. If the company can't afford to provide any new employee recruitment, it can cancel or delay placement in its offer letter. As I mentioned previously, the employee-employer relationship comes into force only when the employee reports for duty with an accepted joining report.

Though this case is heard to be a violation of natural justice on one side, the other side is that nothing can be done by the recruited employee if the company fails to absorb them, mostly due to financial setbacks of the company. Even government institutions sometimes do the same. The employee has to wait for their turn if it is a reliable, reputed company.