Dear Friends,
One senior official of our company advised me to issue a "Letter of Intent" and not an "Offer Letter" when offering a job to a candidate. He mentioned that issuing an "Offer Letter" would legally bind us to keep the candidate, whereas such an obligation would not exist with a "Letter of Intent." I would appreciate your valued opinions on this matter.
Bibek Banerjee
From India, Calcutta
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1One senior official of our company advised me to issue a "Letter of Intent" and not an "Offer Letter" when offering a job to a candidate. He mentioned that issuing an "Offer Letter" would legally bind us to keep the candidate, whereas such an obligation would not exist with a "Letter of Intent." I would appreciate your valued opinions on this matter.
Bibek Banerjee
From India, Calcutta
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Normally, a letter of intent is issued for the work/contract. It is common practice to issue an offer letter for a job. When you are issuing an offer letter, you must be sure that you need that person; otherwise, do not issue the letter. In this case, the question of keeping/rejecting/denying does not arise after the offer letter. Follow healthy HR practices.
Cheers,
N. N. Tiwari
From India, New Delhi
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Cheers,
N. N. Tiwari
From India, New Delhi
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Hi,
Letter of Intent - Confirmation of hiring that resource, but CTC will not be mentioned.
Offer Letter - With CTC details.
It is better to give intent because some may go for other interviews holding this offer letter with CTC. If wrong, kindly advise me.
Thanks,
Mukesh.
From India, Madras
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Letter of Intent - Confirmation of hiring that resource, but CTC will not be mentioned.
Offer Letter - With CTC details.
It is better to give intent because some may go for other interviews holding this offer letter with CTC. If wrong, kindly advise me.
Thanks,
Mukesh.
From India, Madras
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All terms and conditions need to be clear and mutually agreed upon by both parties beforehand for a contract to be legally valid. Suppressing details regarding CTC is not a sound practice, almost akin to not providing a salary slip before disbursing salary.
As far as the letter of intent vs. offer letter goes, let's take an example: What happens when an employee resigns from the previous company and then, upon joining your company, finds the terms and conditions contrary to his expectations? What are the legal implications and effects on turnover/loss of goodwill in such a scenario?
Surya
From India, Delhi
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As far as the letter of intent vs. offer letter goes, let's take an example: What happens when an employee resigns from the previous company and then, upon joining your company, finds the terms and conditions contrary to his expectations? What are the legal implications and effects on turnover/loss of goodwill in such a scenario?
Surya
From India, Delhi
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Hi Surya,
Your information is highly valuable. It speaks more on organizational ethics. However, candidates might misinterpret our offer. They will have many choices in the market very easily when we issue the offer letter.
Regards,
Mukesh
From India, Madras
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Your information is highly valuable. It speaks more on organizational ethics. However, candidates might misinterpret our offer. They will have many choices in the market very easily when we issue the offer letter.
Regards,
Mukesh
From India, Madras
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Hi Mukesh,
The offer letter speaks about faith and trust from both sides. As an employer, you are confirming the employee to join you, and the employee also seeks protection when he/she leaves another company.
Just imagine, to target antisocial elements, if you are not providing CTC, then unethical companies can exploit the masses to a great extent with this power.
And if a person negotiates offers with others, do you think he/she has character? And if you take individuals without character with you, what will your growth be? It's better to work with polished and desired individuals rather than just meeting recruitment targets artificially.
It's a way of retention... isn't it?
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The offer letter speaks about faith and trust from both sides. As an employer, you are confirming the employee to join you, and the employee also seeks protection when he/she leaves another company.
Just imagine, to target antisocial elements, if you are not providing CTC, then unethical companies can exploit the masses to a great extent with this power.
And if a person negotiates offers with others, do you think he/she has character? And if you take individuals without character with you, what will your growth be? It's better to work with polished and desired individuals rather than just meeting recruitment targets artificially.
It's a way of retention... isn't it?
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Hi Mukesh,
I have gone through opinions expressed by members on the point raised. There are two types of contracts. One is "Contract of service," and the other is "Contract for service." There is a difference between the two. A letter of intent is a term used in the tendering processes and never in appointments for jobs. The legal implications are that when you issue a letter of intent, that can never be treated as an offer of appointment. When an employee joins your organization against a letter of intent and you allow him to join, then there becomes a legal binding between your organization and the employee. In all legal aspects, he becomes your employee and is bound by your organization's rules and regulations.
Therefore, I do not see any shrewdness in changing the word "offer of appointment" to "letter of intent." Secondly, when you use the term "letter of intent," you are badly damaging the image of your organization in public. The malicious intent becomes quite clear, i.e., mens rea. It becomes even clearer when you dismiss the employee without following the due process of law, i.e., actus reus. The offense is complete against the organization when you act to dismiss the employee. I am of the firm opinion that using a letter of intent instead of an offer of appointment is legally and morally wrong. If someone does not agree with my views, please express your opinions. I would be glad to know your views. The advice given by your senior appears to be extremely shrewd without considering the legal and moral implications. The senior seems to be a Contracts specialist. The issuance of an "offer of appointment" is the best approach. My advice to you is that you must seek a legal opinion from your law department if it exists.
Regards,
Yours Truly,
Satish Kumar Dhanwal,
Head (HR),
NTPC Foundation,
Noida
From India, Delhi
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I have gone through opinions expressed by members on the point raised. There are two types of contracts. One is "Contract of service," and the other is "Contract for service." There is a difference between the two. A letter of intent is a term used in the tendering processes and never in appointments for jobs. The legal implications are that when you issue a letter of intent, that can never be treated as an offer of appointment. When an employee joins your organization against a letter of intent and you allow him to join, then there becomes a legal binding between your organization and the employee. In all legal aspects, he becomes your employee and is bound by your organization's rules and regulations.
Therefore, I do not see any shrewdness in changing the word "offer of appointment" to "letter of intent." Secondly, when you use the term "letter of intent," you are badly damaging the image of your organization in public. The malicious intent becomes quite clear, i.e., mens rea. It becomes even clearer when you dismiss the employee without following the due process of law, i.e., actus reus. The offense is complete against the organization when you act to dismiss the employee. I am of the firm opinion that using a letter of intent instead of an offer of appointment is legally and morally wrong. If someone does not agree with my views, please express your opinions. I would be glad to know your views. The advice given by your senior appears to be extremely shrewd without considering the legal and moral implications. The senior seems to be a Contracts specialist. The issuance of an "offer of appointment" is the best approach. My advice to you is that you must seek a legal opinion from your law department if it exists.
Regards,
Yours Truly,
Satish Kumar Dhanwal,
Head (HR),
NTPC Foundation,
Noida
From India, Delhi
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Hi,
I firmly believe in Mr. Satish's analysis. We need to respect statutory rules and understand the implications on our internal resources as well as on the company's reputation. It's an open market, and we need to understand that resources will choose the best for themselves during their job hunt. As HR professionals, we are the brand ambassadors, and we need to market our company in such a way that potential candidates are interested in joining, rather than using tactics that create a negative impression of our organization.
I would suggest using offer letters and proceeding to hire the resources that are willing to work in your organization.
Regards,
Manisha
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I firmly believe in Mr. Satish's analysis. We need to respect statutory rules and understand the implications on our internal resources as well as on the company's reputation. It's an open market, and we need to understand that resources will choose the best for themselves during their job hunt. As HR professionals, we are the brand ambassadors, and we need to market our company in such a way that potential candidates are interested in joining, rather than using tactics that create a negative impression of our organization.
I would suggest using offer letters and proceeding to hire the resources that are willing to work in your organization.
Regards,
Manisha
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Hi everyone,
I quite agree with Mr. Dhanwal that an Offer Letter is what you offer, and no other form should be used after you have made up your mind to 'finally' select a candidate.
Regards,
Neeraj Bharadwaj
Head HR
SDS LTD
From India, Mumbai
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I quite agree with Mr. Dhanwal that an Offer Letter is what you offer, and no other form should be used after you have made up your mind to 'finally' select a candidate.
Regards,
Neeraj Bharadwaj
Head HR
SDS LTD
From India, Mumbai
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Hi Neeraj, Thanks for appreciation and inderstanding my point of view on the point in issue. reagrds,Yours truly, Satish Kumar Dhanwal, Head 9HR), NTPC Foundation, Noida
From India, Delhi
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From India, Delhi
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Hi Neeraj, Thanks for appreciation and understanding my point of view on the point in issue. reagrds,Yours truly, Satish Kumar Dhanwal, Head (HR), NTPC Foundation, Noida
From India, Delhi
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From India, Delhi
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Dear All,
I am in full agreement with Mr. Satish Kumar Dhanwal because he is right!!!
Firstly, what is going on in the mind of the CEO, assuming that he is sound? What's the purpose of issuing the letter of intent... what meaning is it to serve? All relationships as per a valid contract have reciprocating responsibilities towards one another (parties to the contract). This responsibility can, in other words, be referred to as the consideration that is an important element of any contract which is good in the eyes of the law and without which no contractual relationship is valid. Does the CEO in such a case look for an invalid and illegal relationship (grrrrrrr...???) or giving him some credit, maybe he means that instead of making an offer that would be (situationally or circumstantially) disadvantageous to the party making an offer, the CEO wants to make what is otherwise known as "an invitation to offer". Say, for example, an invitation to sell is different from the offer to sell (Refer to "Law of Contracts"). If so, then an appropriately drafted and titled document needs to be done, and according to me, it should not be a letter of intent. Maybe the CEO was using this term not technically but in the normal spoken English parlance!!! Any more comments?? Views???
M.A. Ganju
From United Arab Emirates, Sharjah
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I am in full agreement with Mr. Satish Kumar Dhanwal because he is right!!!
Firstly, what is going on in the mind of the CEO, assuming that he is sound? What's the purpose of issuing the letter of intent... what meaning is it to serve? All relationships as per a valid contract have reciprocating responsibilities towards one another (parties to the contract). This responsibility can, in other words, be referred to as the consideration that is an important element of any contract which is good in the eyes of the law and without which no contractual relationship is valid. Does the CEO in such a case look for an invalid and illegal relationship (grrrrrrr...???) or giving him some credit, maybe he means that instead of making an offer that would be (situationally or circumstantially) disadvantageous to the party making an offer, the CEO wants to make what is otherwise known as "an invitation to offer". Say, for example, an invitation to sell is different from the offer to sell (Refer to "Law of Contracts"). If so, then an appropriately drafted and titled document needs to be done, and according to me, it should not be a letter of intent. Maybe the CEO was using this term not technically but in the normal spoken English parlance!!! Any more comments?? Views???
M.A. Ganju
From United Arab Emirates, Sharjah
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Dear Mr. Sathish and other friends,
Thank you for your valued opinion. Ethically, issuing a 'Letter of Intent' is wrong, but I wanted a legal perspective on whether issuing an "Offer Letter" will legally bind organizations to recruit him. If so, is it safe to issue a 'Letter of Intent'? What do legality and the law of the land say?
Bibek Banerjee
From India, Calcutta
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Thank you for your valued opinion. Ethically, issuing a 'Letter of Intent' is wrong, but I wanted a legal perspective on whether issuing an "Offer Letter" will legally bind organizations to recruit him. If so, is it safe to issue a 'Letter of Intent'? What do legality and the law of the land say?
Bibek Banerjee
From India, Calcutta
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Hi Banerji,
There are so many slips between the cup and the lip. When an offer has been made, it does not automatically legally bind both parties until it is accepted by the other party. You seem to have an understanding that once an offer has been issued, it becomes binding on the employer. The approach from both parties should be humane and legal, i.e., the employer and the candidate to whom the offer has been made. I know young, educated, and qualified individuals misusing the offer of appointment to get a better offer from another employer or from the employer with whom they are currently working. These are pressure tactics that work better in politics and international relations. One will lose credibility in the job market once exposed with such pressure tactics, and it may be that nobody who knows the candidate will offer him a job. Additionally, from his CV, such behavior can be gauged. I hope I have been able to satisfy your urge for clarification on this issue you raised. :)
Regards,
Yours,
Satish Kumar
Head (HR)
NTPC Foundation
Noida
From India, Delhi
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There are so many slips between the cup and the lip. When an offer has been made, it does not automatically legally bind both parties until it is accepted by the other party. You seem to have an understanding that once an offer has been issued, it becomes binding on the employer. The approach from both parties should be humane and legal, i.e., the employer and the candidate to whom the offer has been made. I know young, educated, and qualified individuals misusing the offer of appointment to get a better offer from another employer or from the employer with whom they are currently working. These are pressure tactics that work better in politics and international relations. One will lose credibility in the job market once exposed with such pressure tactics, and it may be that nobody who knows the candidate will offer him a job. Additionally, from his CV, such behavior can be gauged. I hope I have been able to satisfy your urge for clarification on this issue you raised. :)
Regards,
Yours,
Satish Kumar
Head (HR)
NTPC Foundation
Noida
From India, Delhi
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Dear Mr. Satish Kumar,
While, in general, I agree with your above reply (definitely a wise and commonsense point of view), I do not think there is really anything wrong in a prospective employee using the letter of appointment (wisely, discreetly, and if warranted to strengthen one's point) for negotiating a better deal with other prospective employers than the one who had issued an appointment letter. Much depends upon the circumstances and typical situations of the particular case.
For example, say Mr. X from India has been in Dubai for 1 1/2 months seeking a job. Subsequent to having attended an interview in a particular company (Head Office: Dubai), Mr. X gets the appointment letter to take up the position in Qatar instead of in Dubai, where this company's branch office is present. All the time, the prospective employee is not apprised or kept informed in advance about his posting. Mr. X receives the appointment letter, he signs the copy of the appointment letter as having "received the original copy," without specifically mentioning that he is "accepting the appointment." Moreover, Mr. X (who comes to know informally about this prospective offer at the eleventh hour), orally and also immediately before receiving the appointment letter, through e-mail, makes it known to the company (Senior Manager (HR)) his inability to join in Qatar for certain valid reasons and requests the management to consider his posting in Dubai itself. Mr. X says he is ready to wait for a month or so though the prospective employer is under no obligation to post him in Dubai or provide any employment in Dubai. Now, will Mr. X's receiving the appointment letter amount to his acceptance? Not necessarily, and this is evident from your observation too, I guess.
Now since he cannot take up the job in Qatar and at the same time not wishing to go back to India empty-handed, he takes the appointment letter. Since his visa processing has to be done by the company's H.O (through its another branch office in India) that issued him an appointment order, Mr. X, after having expressed his inability to do so, requests the company (H.O) not to process his visa for Qatar, and further requests them to consider his posting in Dubai even if it takes some more time in the future. He receives an informal reply from a person representing the management that they will try, though nothing is guaranteed. Mr. X says he will still wait for the offer but also keep trying for job opportunities meanwhile in India. (Let us assume that the final informal talks have no legal bearing and have no significance to what I am trying to point out here now). Now, Mr. X also keeps seeking job opportunities on his return to India. Can he use this appointment order to demonstrate a point with (other) prospective employers (in India) with whom he is attending an interview and negotiations or not? How you look at this is dependent on that specific situation. Does not Mr. X have the right to project his case of worthiness and employability if deemed necessary or where a point so arises to defend his terms of negotiation, with other prospective employers if warranted?
When it comes to the prospective employee, is it wrong, whereas when it comes to the negotiations/bargaining by the prospective employer, anything they do and say is right? Don't we see that most of the time it is the prospective employers who have an advantage, an upper hand, and a better say (usually)? And how ethical and morally right are the so-called representatives of these prospective employers who keep telling the prospects, without themselves in any way being sure, that "the sky is the limit" for the prospective employees' growth; "will consider this or that at the time of confirmation or 6 months later, etc."? For instance, what moral right or business do prospective employers have to negotiate on the BASIS of the employee's previous CTC? Is it not a free market where the supply and demand and the negotiating abilities and ethics should be equally applicable? (I am against the eye for an eye tactics or unethical methods).
To draw conclusions, including from what you have said, either party can have a right to know certain pertinent information they require, but they cannot solely use that as the point of reasoning out or basing their argument or justifying their offers or built-up biases to coerce the other party into it when the other party feels that the information revealed is being unjustly the basis for the other's unfair negotiating tactics or being used against him. THAT WHAT ACTUALLY HAPPENS IS DIFFERENT FROM WHAT OUGHT TO BE THE CASE, IS A DIFFERENT MATTER. But before any party points out a finger at the other, the finger pointer should also see how many of his/her own fingers are pointed towards himself/herself. One ought not to stereotype the other. Your comments, please?!
Regards,
M.A. Ganju
Now, Mr. X returns to India
From United Arab Emirates, Sharjah
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While, in general, I agree with your above reply (definitely a wise and commonsense point of view), I do not think there is really anything wrong in a prospective employee using the letter of appointment (wisely, discreetly, and if warranted to strengthen one's point) for negotiating a better deal with other prospective employers than the one who had issued an appointment letter. Much depends upon the circumstances and typical situations of the particular case.
For example, say Mr. X from India has been in Dubai for 1 1/2 months seeking a job. Subsequent to having attended an interview in a particular company (Head Office: Dubai), Mr. X gets the appointment letter to take up the position in Qatar instead of in Dubai, where this company's branch office is present. All the time, the prospective employee is not apprised or kept informed in advance about his posting. Mr. X receives the appointment letter, he signs the copy of the appointment letter as having "received the original copy," without specifically mentioning that he is "accepting the appointment." Moreover, Mr. X (who comes to know informally about this prospective offer at the eleventh hour), orally and also immediately before receiving the appointment letter, through e-mail, makes it known to the company (Senior Manager (HR)) his inability to join in Qatar for certain valid reasons and requests the management to consider his posting in Dubai itself. Mr. X says he is ready to wait for a month or so though the prospective employer is under no obligation to post him in Dubai or provide any employment in Dubai. Now, will Mr. X's receiving the appointment letter amount to his acceptance? Not necessarily, and this is evident from your observation too, I guess.
Now since he cannot take up the job in Qatar and at the same time not wishing to go back to India empty-handed, he takes the appointment letter. Since his visa processing has to be done by the company's H.O (through its another branch office in India) that issued him an appointment order, Mr. X, after having expressed his inability to do so, requests the company (H.O) not to process his visa for Qatar, and further requests them to consider his posting in Dubai even if it takes some more time in the future. He receives an informal reply from a person representing the management that they will try, though nothing is guaranteed. Mr. X says he will still wait for the offer but also keep trying for job opportunities meanwhile in India. (Let us assume that the final informal talks have no legal bearing and have no significance to what I am trying to point out here now). Now, Mr. X also keeps seeking job opportunities on his return to India. Can he use this appointment order to demonstrate a point with (other) prospective employers (in India) with whom he is attending an interview and negotiations or not? How you look at this is dependent on that specific situation. Does not Mr. X have the right to project his case of worthiness and employability if deemed necessary or where a point so arises to defend his terms of negotiation, with other prospective employers if warranted?
When it comes to the prospective employee, is it wrong, whereas when it comes to the negotiations/bargaining by the prospective employer, anything they do and say is right? Don't we see that most of the time it is the prospective employers who have an advantage, an upper hand, and a better say (usually)? And how ethical and morally right are the so-called representatives of these prospective employers who keep telling the prospects, without themselves in any way being sure, that "the sky is the limit" for the prospective employees' growth; "will consider this or that at the time of confirmation or 6 months later, etc."? For instance, what moral right or business do prospective employers have to negotiate on the BASIS of the employee's previous CTC? Is it not a free market where the supply and demand and the negotiating abilities and ethics should be equally applicable? (I am against the eye for an eye tactics or unethical methods).
To draw conclusions, including from what you have said, either party can have a right to know certain pertinent information they require, but they cannot solely use that as the point of reasoning out or basing their argument or justifying their offers or built-up biases to coerce the other party into it when the other party feels that the information revealed is being unjustly the basis for the other's unfair negotiating tactics or being used against him. THAT WHAT ACTUALLY HAPPENS IS DIFFERENT FROM WHAT OUGHT TO BE THE CASE, IS A DIFFERENT MATTER. But before any party points out a finger at the other, the finger pointer should also see how many of his/her own fingers are pointed towards himself/herself. One ought not to stereotype the other. Your comments, please?!
Regards,
M.A. Ganju
Now, Mr. X returns to India
From United Arab Emirates, Sharjah
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Dear All,
Letter of Intent (LOI), as it is called, is prevalent not only in fields other than Contracts of Personal Service, but with the advent of Globalisation, it can also make inroads into this field. Until an action is tested for breach or unfairness by a Court of Law, the field remains open for introducing innovative practices like LOI even in Contracts of Personal Service. Until such time, no practice can be ruled out abruptly.
With Regards,
V. Sounder Rajan
Email: rajanassociates@eth.net
From India, Bangalore
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Letter of Intent (LOI), as it is called, is prevalent not only in fields other than Contracts of Personal Service, but with the advent of Globalisation, it can also make inroads into this field. Until an action is tested for breach or unfairness by a Court of Law, the field remains open for introducing innovative practices like LOI even in Contracts of Personal Service. Until such time, no practice can be ruled out abruptly.
With Regards,
V. Sounder Rajan
Email: rajanassociates@eth.net
From India, Bangalore
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Since we are talking about offer letters and appointment letters, I have a question regarding the NGO sector: how long can an employee be under contract? Is it acceptable to offer a fresh contract every 11 months? If so, for how long can we continue this practice? Can anyone provide some good suggestions?
From India, Madras
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From India, Madras
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Offer of Appointment is not much more deferrent than Offer Letter. the main thing is the intention.
From India, Calcutta
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From India, Calcutta
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All,
Why would you offer a letter of intent? That's crazy. If you feel that the candidate is not the right person for the post, keep looking. This is not good business for your organization. Be sure that when you give someone the "intent," that you make them an "offer" again if you are on the fence. There is an old saying, "when there's a doubt, pull it out."
Regards,
Jermaine Morris
HRG - Chicago
From United States, Chicago
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Why would you offer a letter of intent? That's crazy. If you feel that the candidate is not the right person for the post, keep looking. This is not good business for your organization. Be sure that when you give someone the "intent," that you make them an "offer" again if you are on the fence. There is an old saying, "when there's a doubt, pull it out."
Regards,
Jermaine Morris
HRG - Chicago
From United States, Chicago
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Fully agree with Mr. Satish and Ms. Manisha. As an HR professional, we should remember that what we are dealing with are humans, and so we should be humane in our dealings. A Letter of Intent is more of an agreement for the purchase of shares or assets, works, lease agreements, etc. However, an Offer Letter is, as the name suggests, an offer made to an individual for hiring their services, and it also reflects the ethics practiced in one's organization.
You should go ahead with the Offer Letter, which is more professional and ethical.
Jignesh Patel GM HR GLPC Ltd
From India, Pune
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You should go ahead with the Offer Letter, which is more professional and ethical.
Jignesh Patel GM HR GLPC Ltd
From India, Pune
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