Need Advice on Reissuing Appointment Letters: Old or New Salary Structure?

Dear Seniors,

I have come across many of your replies to the queries by the members on CiteHR and am quite impressed. First of all, thanks for your guidance! I am working as an HR in one of the startup product companies, and I am very new in HR. I need your guidance on the following.

Scenario:

We issued an Appointment Letter to the employees on the letterhead of our US entity in August 2020, not on the letterhead of the Indian entity. Now, we have been advised that we need to reissue the letters of appointment to the same employees on the letterhead of the Indian entity. These employees have had their appraisals implemented in April 2021.

Query:

Firstly, do we need to reissue the Appointment Letter with the old salary structure, or should I issue the letter with the new CTC structure applicable from April 2021?

Secondly, do I need to include all the old clauses in the new letter, or can I only issue a letter mentioning the new clause and CTC structure?

Looking forward to hearing from you soon! Thanks in Advance.

Regards, Swati

Dear Swati M,

You have a case of the incorrect use of the letterhead. Now you are correcting the mistake. To correct the mistake, just issue the same appointment letter on the letterhead that has the Indian company's address. Keep the verbatim of the old appointment letter, including the date of issue.

While issuing the fresh appointment letter, ask employees to deposit the old one and take the new one. It will be a matter of exchanging the appointment letters, old and new.

While issuing a circular on the exchange of the appointment letter, just mention that this exchange has been mandated because of the incorrect use of the letterhead.

As far as the matter of an increase in salary because of the annual salary increment is concerned, it has nothing to do with the issue of the appointment letter with a new letterhead. Therefore, do not link both issues.

Though I have put forth my views, please wait for the other members to put forth their views as well.

Thanks,

Dinesh Divekar

As rightly pointed out by our esteemed Dinesh Sir, please issue a revised letter on the letterhead of the Indian subsidiary, repeating verbatim the contents in full. Additionally, by a separate order, include the revised salary structure effective from April 2021, and cancel the earlier appointment order. Ensure to obtain an acknowledgment of receipt of the new orders and maintain it in proper custody.

While you can follow Dinesh's suggestions verbatim to correct the situation in the short term, I have a basic query.

Why was the Appointment Letter issued on the USA Letterhead?

Was the Indian entity not formed in August 2020? If yes, then you may need to make suitable changes in the Appointment Letter you intend to issue now on the India Letterhead. If no, there's a possibility of legal issues being raised later by any over-smart employee questioning why the offer was given on the US Letterhead instead of the Indian one when the Indian entity exists.

Either way, I suggest you consult your legal advisor to ensure that any possible long-term consequences are adequately covered.

Regards, TS

Add to this, I have one query: If we have to change any clause in the appointment letter and that change is applicable only to a few employees, can we re-issue the revised appointment letter only to those specific employees, or do we need to issue the letter to all the employees?