Withdrawal of an offer by Employer - How do I take action against such an employer?

Dear Experts,

I received an offer from XXX company last month for their IT department. However, two days before my joining, HR sent an email stating the withdrawal of the offer because the vendor is delaying their product implementation, which was the reason for my hiring. How can I take action against such an employer? My current employer has already hired a replacement, so there is no possibility of returning to the old company. Kindly suggest, as I am the sole breadwinner in my family of four.

Hi Jignesh, It's important to consult with a legal professional for advice tailored to your specific circumstances.

Review the Offer Letter
First, carefully review the offer letter you received from XXX company. Pay special attention to any clauses related to employment termination or withdrawal of offers.

Contact the Company
Reach out to the HR representative who sent you the email about the withdrawal of the offer. Ask for a detailed explanation of the situation and any potential recourse.

Consult with an Employment Attorney
Consider seeking advice from an employment attorney. They can provide guidance on your rights and potential courses of action.

Document Everything
Keep records of all communications with the company, including emails, messages, and any other relevant documents. This will be important if you decide to take legal action.

Consider Negotiation
If you feel there's a possibility of resolving the situation without legal action, you might want to discuss this with the company. This could involve negotiating for compensation or other arrangements due to the hardship caused.

Explore Unemployment Benefits
Depending on your location and specific circumstances, you may be eligible for unemployment benefits. Check with your local labor department to understand your options.

Job Search
Begin looking for new job opportunities as soon as possible. Since you're the primary breadwinner for your family, it's crucial to secure stable employment.

Evaluate Financial Options
Consider your financial situation and explore options such as emergency funds, loans, or government assistance programs that might be available in your area.

Maintain Professionalism
Even though you're understandably upset, maintain a professional demeanor in all your interactions with the company. This will reflect positively on you in case the situation escalates.

Consider Mediation
If discussions with the company are unproductive, you might explore mediation services. This can be a more cost-effective and less adversarial way to resolve disputes.

Always, it is crucial to consult with a qualified employment attorney who can provide legal advice based on your specific circumstances and the laws in your jurisdiction. They can guide you on the best course of action to take.

Thanks

Thank you, Dr. Raghunath, for your valuable suggestions. I have already followed the first two steps as mentioned by you, as I did not find any exceptional clause in the offer letter, except for the joining date, to which I replied within the time limit. I will try to seek advice from an Employment Attorney. Can you please share the details of mediation services, as it seems that may be the only option considering the present situation?

Hi Jignesh,

It is very unfortunate that XXX Company revoked the offer issued to you two days prior to joining them.

Reviewing the offer letter

Have you gone through the offer letter in detail? Have you checked for a clause in the offer letter stating that the company reserves the right to cancel the offer at any time before the candidate joins the company?

Legal considerations and challenges

Obviously, it is a breach of the terms mutually agreed upon between XXX Company and you. Company XXX is not supposed to cancel the offer unilaterally. Yes, for sure, you can initiate legal action against Company XXX by hiring the services of a lawyer, which involves a cost factor. However, be aware of the bare reality that, unlike Western countries, in India, the judicial process will be time-consuming and lengthy. In this process, you will need to substantiate how the cancellation of the offer had an impact on you, etc. To defend their side, the employer might go to any extent, and they will be able to spend money. How long will you be able to sustain without employment during the course of a legal battle?

Considering alternative options

There are probabilities of you getting a favorable verdict, but the timeframe cannot be assured. Rather, why not ignore this and look for a better opportunity? My assessment is that XXX Company has lost its credibility, and it is highly suggested that you look for some other better offer!

Dear Jignesh,

Under the provisions of the Indian Contract Act of 1872, an appointment letter is a contract between an employer and an employee. Since it is a contract, its provisions are binding on both parties. However, is the offer letter also a contract under the provisions of the said act? This is a moot point. Even if you file a suit against the company, and the judge rules that the offer letter is not a contract, your case could be defeated.

Furthermore, was there a clause on the liabilities for the revocation of the offer letter? If this clause was not mentioned, then on what grounds will you file a lawsuit?

Occasionally, candidates accept the offer letter and later back out. To avoid this last-minute no-show, companies have started inserting the revocation clause as well as the clause on "no-show." This is called "Liquidated Damage (LD)." In your case, please check the offer letter properly for the LD clause.

Notwithstanding what I have written above, I empathize with you. In life, occasionally we do get setbacks. Take this as a setback and move on. Start searching for a job vigorously.

In the meantime, request the HR professional to send you a proper letter on the revocation of the job offer. Explain to him that the revocation of the job offer will create an employment gap in your career. To explain this gap, a letter on withdrawal of the job offer will come in handy.

Thanks,

Dinesh Divekar

Revocation of Employment Offer by XXX Co

The action of revoking the employment offer by XXX Co is faulty and illegal. Due to their irresponsible act, a person's career is at stake. You should talk to the HR department of XXX Co, explaining your difficult situation and inquiring about the options available to you. Consider lodging a FIR against the company for cheating and not adhering to the accepted offer. Check your offer letter for any clause that states they can withdraw at any time—if such a clause exists, your options may be limited. It is advisable to consult a good lawyer for this case. However, remember that obtaining a judgment in our legal system can be a lengthy process.