My friend received an offer letter and he had accepted the offer letter. Just 10 days before the joining date, the company withdrew the offer letter stating that they no longer had the requirement. Can my friend take legal action? The company is an MNC and the location is India.
From India, Mumbai
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From India, Mumbai
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Well, technically speaking, he can take legal action. The reason is quite simple: as per the Indian Contract Act of 1872, an offer can be revoked until it is received and accepted by the acceptor. Once the acceptance has been accorded by the acceptor, the agreement comes into existence. Any subsequent revocation would amount to a breach of the agreement and thus invite legal consequences.
But apart from the technical view, let's also consider the practical side of it. The candidate selected by the company has never worked with the company at all, so the candidate never transitioned to an 'EMPLOYEE,' as expected after 10 days. In such an event, there is no question of breach. However, there is still some liability on the company.
Even if the employer company takes such an argument, it will be caught in an ethical and legal wrong. We have already discussed the legal wrong in the technical view. Ethically, if the company extended an offer and it was accepted within a reasonable time, the company must honor it.
Now, the big question is: What can we do? Since it's an MNC, it should have a good team of lawyers either on the panel or on payroll to fight for it. If you are in India, unless you have a really good lawyer, your chances of winning are quite low. Otherwise, you have a case to fight provided you provided your acceptance in time.
From India, Gurgaon
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38But apart from the technical view, let's also consider the practical side of it. The candidate selected by the company has never worked with the company at all, so the candidate never transitioned to an 'EMPLOYEE,' as expected after 10 days. In such an event, there is no question of breach. However, there is still some liability on the company.
Even if the employer company takes such an argument, it will be caught in an ethical and legal wrong. We have already discussed the legal wrong in the technical view. Ethically, if the company extended an offer and it was accepted within a reasonable time, the company must honor it.
Now, the big question is: What can we do? Since it's an MNC, it should have a good team of lawyers either on the panel or on payroll to fight for it. If you are in India, unless you have a really good lawyer, your chances of winning are quite low. Otherwise, you have a case to fight provided you provided your acceptance in time.
From India, Gurgaon
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Hello Valavanur,
Further to what Puneet Sarin suggested/mentioned, please clarify if you have already resigned from your present job. If yes, can you take back the resignation? There are quite a few situations where 'legally' you would be right, but 'practically', the cost-benefit aspects [time, costs & efforts] may not be worth it. I suggest moving on.
All the best,
Regards,
TS
From India, Hyderabad
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Further to what Puneet Sarin suggested/mentioned, please clarify if you have already resigned from your present job. If yes, can you take back the resignation? There are quite a few situations where 'legally' you would be right, but 'practically', the cost-benefit aspects [time, costs & efforts] may not be worth it. I suggest moving on.
All the best,
Regards,
TS
From India, Hyderabad
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Please see the discussions at https://www.citehr.com/470730-can-em...al-action.html
From United Kingdom
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From United Kingdom
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SPKR I do agree with Mr.Puneeth Sarans view. There is no point in shadow boxing.
From India, Bangalore
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From India, Bangalore
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Hi TS and other members,
Considering the above scenario,
Morally, I feel the company is at fault. However, since the candidate never made it to employment, there is no logical reason for a notice period or even for compensation of some kind.
Nevertheless, the candidate obviously resigned from his first job and was ready to move out for the new offer; he can be stuck now! Not every organization (PEOPLE) understands that when an employee resigns, there must be some additional benefits that made him take the step. When we talk about withdrawing one's resignation, that is simply costing the candidate more, leading to losing credibility.
My query:
1. You mentioned that the candidate COULD BE right only on a few occasions! Do ethical bindings/morals have no room in such a trial?
2. When any candidate accepts an offer, is it fair and possible that a compensation-related clause be demanded by the candidate to be included only to protect his/her interest in case such events occur which are not in favor of the company?
3. It is also possible that the employer may ask for a NO-SHOW compensation from the candidate, which seems fair!
Regards
From India
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Considering the above scenario,
Morally, I feel the company is at fault. However, since the candidate never made it to employment, there is no logical reason for a notice period or even for compensation of some kind.
Nevertheless, the candidate obviously resigned from his first job and was ready to move out for the new offer; he can be stuck now! Not every organization (PEOPLE) understands that when an employee resigns, there must be some additional benefits that made him take the step. When we talk about withdrawing one's resignation, that is simply costing the candidate more, leading to losing credibility.
My query:
1. You mentioned that the candidate COULD BE right only on a few occasions! Do ethical bindings/morals have no room in such a trial?
2. When any candidate accepts an offer, is it fair and possible that a compensation-related clause be demanded by the candidate to be included only to protect his/her interest in case such events occur which are not in favor of the company?
3. It is also possible that the employer may ask for a NO-SHOW compensation from the candidate, which seems fair!
Regards
From India
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Dear all,
It is illegal and unethical on the part of the MNC to decline an appointment after the acceptance of the offer of appointment made by them. As pointed out by Puneet, compensation is liable in this regard. However, should it be left like that since court procedures are lengthy, cumbersome, and costly? My suggestion is not to just leave it like this. Let there be some harbingers for change.
KK
From India, Bhopal
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It is illegal and unethical on the part of the MNC to decline an appointment after the acceptance of the offer of appointment made by them. As pointed out by Puneet, compensation is liable in this regard. However, should it be left like that since court procedures are lengthy, cumbersome, and costly? My suggestion is not to just leave it like this. Let there be some harbingers for change.
KK
From India, Bhopal
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If at all, the new company does not want to go into a legal battle, they should have allowed a person to join on probation for three to six months. After a month or two, they could have terminated him for non-satisfactory performance. In either case, the employee is in a tough situation. In practice, an individual cannot easily fight in such scenarios, even if they are completely right.
From India, Mumbai
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From India, Mumbai
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Thank you all for your valuable suggestions. Unfortunately, since the MNC withdrew the offer letter at the very last moment, and his current employer had already recruited another replacement, he had to leave his present job. He is now looking out for opportunities. So he was asking whether taking legal action would help him.
Please let me know if you need any further assistance.
From India, Mumbai
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Please let me know if you need any further assistance.
From India, Mumbai
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Before proceeding legally, it is better if your friend can have a dialogue with the HR Head of the company that has issued the offer letter and explain the hardship and loss faced due to the withdrawal of the offer letter. Let that dialogue be recorded if possible so that it can be used as evidence at a later date during the legal proceedings. Also, make them understand that he will proceed legally if they do not compensate for the loss faced.
Withdrawing an offer by the company is not ethically right, and he will win the case if the company is unable to settle this issue amicably.
From India, Hyderabad
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Withdrawing an offer by the company is not ethically right, and he will win the case if the company is unable to settle this issue amicably.
From India, Hyderabad
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Company Profile.ppt
Offer letter.pdf