In practical sense, this clause will have zero meaning. You will find it impossible to enforce this clause. The candidates also know this, and they know the cost of taking this to court will exceed the amount that you can recover for such expenses. It is also unlikely that the courts will give a judgment in your favor.
From a legal point of view, the offer letter may not even have enforceability from a contract act point of view. Every contract needs consideration. Consideration actually means an offer of something of value in return for something of value. In the case of the offer letter, there is no consideration that has been exchanged. It is actually an agreement of intent to enter into a contract of employment.
If the above view is correct in the eyes of the court, you do not really have any scope of recovery of your money.
From India, Mumbai
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2642From a legal point of view, the offer letter may not even have enforceability from a contract act point of view. Every contract needs consideration. Consideration actually means an offer of something of value in return for something of value. In the case of the offer letter, there is no consideration that has been exchanged. It is actually an agreement of intent to enter into a contract of employment.
If the above view is correct in the eyes of the court, you do not really have any scope of recovery of your money.
From India, Mumbai
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Very interesting debate. As learned member Mr.tajsateesh said, it would have been worth it's while if the member who posted the question, clarified whether he is seeking the answer from employee perspective or from HR(company) perspective as it would have attracted more focused replies from the senior members. From employee's perspective, the question, I believe, centers round the enforce ability of such clause and the consequences of breach thereof. However, the reply to the question from employer's perspective, in my view, is not merely confined to legal ramifications but beyond them.
The employee’s perspective. Here the company, by making an offer, signified it's willingness to promise him a job and puts a condition that he has to reimburse the company of interview expenses, if he declines the offer with a view to obtain his acceptance thereof. Here the clause raises many questions of legal importance such as;
1) How an offer or proposal fructifies into contract when it is declined? Legally an offer or proposal when accepted, becomes a contract.
2) whether the Contract Act envisages consideration for declining an offer, if at all the willingness to reimburse the expenses is considered as consideration. The Act envisages consideration only in case of accepting an offer (of job) or proposal.
3) How far such condition of compulsive nature makes the consent by the candidate as 'free consent' and will It not taint it with 'undue influence' as one party namely the company is in dominant position vis-a-vis a candidate?
4) If the condition becomes operative only in case of declining offer then, is it that the candidate need not reimburse the expense of interview, once he accepts the job and joins and latter quits the next day?
Therefore the clause, to be valid shall strand legal scrutiny and it is not possible to answer the query satisfactorily from legal perspective in this forum as the issue involves so many legal nuances and technical interpretations and it is better to leave it to the courts to decide it. I am not going into the legal aspect of the question.
That leaves us with employer's perspective. The learned members have also attempted to address it. My two cents on this perspective are :-
The anguish and agony of an employer who incurs a cost on hiring and seeing it to go waste is understandable. He may feel helpless to resort to such compulsive options at least to make the candidates join the job, though he may not really mean to recover the expenses. However it is not prudent nor desirable to incorporate such clauses if tested against the principles of prudence, practical wisdom and market psyche.
1)It is paradoxical and inconsistent with the unwritten code of conduct in the business of buying and selling goods and services in markets where the buyer cannot ask the seller to pay for his travel expenses for coming to market, if the seller refuses to sell his articles to him. In the employment market too the employer and the candidate will be in the position of buyer and seller. It is first an employer's immediate need to have required manpower to run his business and it is he who approaches the market directly through advertising or through his agent in the form of a manpower agency to buy manpower to fulfill his need. The candidate only offers to sell his services for a price but does not induce the employer to incur costs of hiring him. For the employer there is no other go but to incur cost to have access to candidates. Therefore when a candidate appears for interview, he does not do so with the knowledge that he has to pay for his interview also. So the transactions till this stage of offer from employer's side, fall into an unwritten understanding or code of conduct (accepted behavioral norms) in the employment market. Therefore it defies logic to pass the cost of hiring to the candidate even with some conditions.
2)Secondly, does it require any guessing as to how many candidates show up for an interview if they know that they have to pay for appearing for their own interview even with some conditions. On the other hand, in some cases, the employers are even willing to pay for travel expenses of the candidates. Therefore It defies, in my view, practical wisdom in hiring and is counter- productive.
3)The paradigms of employment is undergoing a change with tech savvy, freedom loving, job hopping and more entrepreneurial modern Gen-Y work force which may view such conditions as reflecting a negative culture of the organization. With Gen-Y work force so active on social media and ‘whats app’, employer branding may take a beating.
B.Saikumar
HR & Labour Law consultant
From India, Mumbai
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The employee’s perspective. Here the company, by making an offer, signified it's willingness to promise him a job and puts a condition that he has to reimburse the company of interview expenses, if he declines the offer with a view to obtain his acceptance thereof. Here the clause raises many questions of legal importance such as;
1) How an offer or proposal fructifies into contract when it is declined? Legally an offer or proposal when accepted, becomes a contract.
2) whether the Contract Act envisages consideration for declining an offer, if at all the willingness to reimburse the expenses is considered as consideration. The Act envisages consideration only in case of accepting an offer (of job) or proposal.
3) How far such condition of compulsive nature makes the consent by the candidate as 'free consent' and will It not taint it with 'undue influence' as one party namely the company is in dominant position vis-a-vis a candidate?
4) If the condition becomes operative only in case of declining offer then, is it that the candidate need not reimburse the expense of interview, once he accepts the job and joins and latter quits the next day?
Therefore the clause, to be valid shall strand legal scrutiny and it is not possible to answer the query satisfactorily from legal perspective in this forum as the issue involves so many legal nuances and technical interpretations and it is better to leave it to the courts to decide it. I am not going into the legal aspect of the question.
That leaves us with employer's perspective. The learned members have also attempted to address it. My two cents on this perspective are :-
The anguish and agony of an employer who incurs a cost on hiring and seeing it to go waste is understandable. He may feel helpless to resort to such compulsive options at least to make the candidates join the job, though he may not really mean to recover the expenses. However it is not prudent nor desirable to incorporate such clauses if tested against the principles of prudence, practical wisdom and market psyche.
1)It is paradoxical and inconsistent with the unwritten code of conduct in the business of buying and selling goods and services in markets where the buyer cannot ask the seller to pay for his travel expenses for coming to market, if the seller refuses to sell his articles to him. In the employment market too the employer and the candidate will be in the position of buyer and seller. It is first an employer's immediate need to have required manpower to run his business and it is he who approaches the market directly through advertising or through his agent in the form of a manpower agency to buy manpower to fulfill his need. The candidate only offers to sell his services for a price but does not induce the employer to incur costs of hiring him. For the employer there is no other go but to incur cost to have access to candidates. Therefore when a candidate appears for interview, he does not do so with the knowledge that he has to pay for his interview also. So the transactions till this stage of offer from employer's side, fall into an unwritten understanding or code of conduct (accepted behavioral norms) in the employment market. Therefore it defies logic to pass the cost of hiring to the candidate even with some conditions.
2)Secondly, does it require any guessing as to how many candidates show up for an interview if they know that they have to pay for appearing for their own interview even with some conditions. On the other hand, in some cases, the employers are even willing to pay for travel expenses of the candidates. Therefore It defies, in my view, practical wisdom in hiring and is counter- productive.
3)The paradigms of employment is undergoing a change with tech savvy, freedom loving, job hopping and more entrepreneurial modern Gen-Y work force which may view such conditions as reflecting a negative culture of the organization. With Gen-Y work force so active on social media and ‘whats app’, employer branding may take a beating.
B.Saikumar
HR & Labour Law consultant
From India, Mumbai
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Hello everyone, I have a similar query. Actually, I accepted an offer from the company. Initially, I was skeptical about joining, and I wanted to take the offer letter home, but they didn't allow me and also took my phone so that I couldn't Google about the company. They advertised the job with one company name, and before going for the interview, I checked the company on Glassdoor and found nice reviews. However, when accepting the offer, there was a different company name. I asked them about it, and they said it's a subsidiary. Additionally, I was made to sign a check for about 3 lakhs for recruitment cost reimbursement in case I don't turn up on the agreed date.
Upon coming home and searching the company name with which I received the offer letter, I found a separate Glassdoor profile with pathetic reviews. Due to this, I decided not to join and expressed all my concerns to the company. Every time I visited, they manipulated me. Eventually, I decided to join, but just three days before starting, while chatting with a friend, I described the situation without mentioning the company name. He immediately identified the company and warned me not to join.
Currently, they have presented the check for clearing, but I had already given stop payment instructions. Now, they have sent me a legal notice and want to initiate proceedings under section 138. Please advise me on what I should do.
From India, Delhi
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Upon coming home and searching the company name with which I received the offer letter, I found a separate Glassdoor profile with pathetic reviews. Due to this, I decided not to join and expressed all my concerns to the company. Every time I visited, they manipulated me. Eventually, I decided to join, but just three days before starting, while chatting with a friend, I described the situation without mentioning the company name. He immediately identified the company and warned me not to join.
Currently, they have presented the check for clearing, but I had already given stop payment instructions. Now, they have sent me a legal notice and want to initiate proceedings under section 138. Please advise me on what I should do.
From India, Delhi
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