I am not sure how Indian Law operates on this, but here are the questions:
1. If a company cancels a Campus Recruitment offer, is it liable to pay severance pay?
2. If a company postpones a Campus Recruitment offer, is it liable to pay a subsistence allowance?
From United States, Daphne
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501. If a company cancels a Campus Recruitment offer, is it liable to pay severance pay?
2. If a company postpones a Campus Recruitment offer, is it liable to pay a subsistence allowance?
From United States, Daphne
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Dear Mr. Nikhil,
The offer of employment is limited to the extent of the employer's willingness to provide a job. Considering the volatile market conditions, at times it may not be feasible to honor these offers. However, ethical business practices demand honoring this commitment albeit belatedly.
The definition of severance pay is "The compensation that an employer provides to an employee who has been laid off." Since the offer of employment does not establish an employer-employee relationship, the question of severance pay does not arise.
A subsistence allowance is paid when the employee is suspended or when an inquiry is in progress. This allowance is provided to avoid economic hardship. As the offer of employment does not establish an employer-employee relationship, the question of a subsistence allowance does not arise.
During the economic recession of 2008-2010, many IT companies did not proceed with recruiting the candidates they had selected in campus drives. They had put the recruitment on hold. However, none of them had provided any allowance or compensation to the freshly graduated students. Infosys, as a matter of courtesy, had sent an email to the candidates stating that their offer of employment remained valid, although the actual employment could be delayed.
An appointment letter is a crucial document. Once the employee signs the appointment letter, he/she becomes an employee, and then Indian labor laws are applicable to both sides.
The heading of your post states "Canceling a Campus Recruitment Offer." The cancellation of campus recruitment reflects poorly on the company and can damage its brand image.
Consider the situation of the students. When a student is selected in a campus drive, college authorities often do not allow that student to participate in another company's campus drive. If a company selects students and later withdraws the offer, where will these students turn to?
If companies resort to such practices, educational institutions may decide to prohibit them from future campus drives. In an economic boom, isn't this a significant loss for the company?
Dinesh V Divekar
"Beware of false knowledge; it is more dangerous than ignorance."
From India, Bangalore
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The offer of employment is limited to the extent of the employer's willingness to provide a job. Considering the volatile market conditions, at times it may not be feasible to honor these offers. However, ethical business practices demand honoring this commitment albeit belatedly.
The definition of severance pay is "The compensation that an employer provides to an employee who has been laid off." Since the offer of employment does not establish an employer-employee relationship, the question of severance pay does not arise.
A subsistence allowance is paid when the employee is suspended or when an inquiry is in progress. This allowance is provided to avoid economic hardship. As the offer of employment does not establish an employer-employee relationship, the question of a subsistence allowance does not arise.
During the economic recession of 2008-2010, many IT companies did not proceed with recruiting the candidates they had selected in campus drives. They had put the recruitment on hold. However, none of them had provided any allowance or compensation to the freshly graduated students. Infosys, as a matter of courtesy, had sent an email to the candidates stating that their offer of employment remained valid, although the actual employment could be delayed.
An appointment letter is a crucial document. Once the employee signs the appointment letter, he/she becomes an employee, and then Indian labor laws are applicable to both sides.
The heading of your post states "Canceling a Campus Recruitment Offer." The cancellation of campus recruitment reflects poorly on the company and can damage its brand image.
Consider the situation of the students. When a student is selected in a campus drive, college authorities often do not allow that student to participate in another company's campus drive. If a company selects students and later withdraws the offer, where will these students turn to?
If companies resort to such practices, educational institutions may decide to prohibit them from future campus drives. In an economic boom, isn't this a significant loss for the company?
Dinesh V Divekar
"Beware of false knowledge; it is more dangerous than ignorance."
From India, Bangalore
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