Can A Company Take A Legal Action Against A Candidate Who Accepts Offer Letter And Reject It Later? Please Provide Guidance.

Hello,

I came across a situation where we selected a candidate, offered him a job, and he accepted the offer. We also had him sign an acceptance letter confirming his acceptance of our offer. Following our mutual discussion, we gave him a two-week period to join. However, on the scheduled day of joining, he expressed his unwillingness to join our company.

We currently possess his acceptance letter and offer letter, both of which clearly indicate his acceptance of our offer. With this documentation in hand, are we able to take any legal actions against this candidate in this scenario?

Experts, please share your insights.

Dear Swati,

To give a proper opinion, we need a little more information. Please confirm the contents of your offer letter. You may delete the candidate's name.

Secondly, acceptance of the "Offer Letter" does not establish an employer-employee relationship. Therefore, on what grounds can you sue the candidate? A breach of agreement would have occurred only if you had given him the appointment letter confirming his future date of appointment. However, all these are surmises, and the best opinion can be provided only when we know the contents of the "Offer Letter".

"No-shows" in the job market are common. This is because there are more jobs than candidates who fulfill the qualifying requirements in all respects. Yes, "no-shows" throw the company's planning into disarray. But then, for every business, there is a downside, and this is no exception.

Thanks,

Dinesh V Divekar

Please see https://www.gov.uk/job-offers-your-rights. It all depends upon the offer letter and acceptance as explained by Dinesh Divekar.

But is litigation worth it??

Thank you, Dinesh, for the prompt reply.

Following is the content of the acceptance letter:

Dear [Recipient's Name],

I am writing to confirm my acceptance of your employment offer for (date) as (designation) and to express my excitement about joining (company name). The work aligns perfectly with my aspirations and I am confident that I can make a significant contribution to the corporation. I am truly grateful for this opportunity you have extended to me.

As discussed, I will report to work at (time) on (date).

I am looking forward to collaborating with you and your esteemed team. Your confidence in me is greatly appreciated, and I am thrilled to become a part of your organization.

Sincerely,

[Candidate's Name]

Also, I want to clarify that we do not intend to take any legal action, but I would like to know if there are any available options or not.

Why do you want to go behind a person who is not interested in your company? Why do you waste time on this issue? Better look for a suitable candidate.

Pon

I seriously don’t understand how can an email and “offer letter” acceptance be treated as an establishment of employment..

Mr Divekar has rightly said that the acceptance of offer letter does not mean, a candidate became an employee but still a candidate and you don’t have any right to take any legal or formal action against any candidate, but need to be more conscious with recruitment and interview procedure.

One more thing to remind you that until employee offered appointment letter and provide you his/her acceptance, deserve the right to think again over his/her decision as well as you being an EMPLOYER if found any better candidature. However, I agree morally these acts wont be professional and ethical.

So please forget about it and realize the value of your time and need of good candidature, go ahead with your work

To accept and reject offer letters by Employee/Employer is also a serious concern just like as to ignore /miss the interview schedules by candidates after accepting or agreeing on it and that cause the wastage of time, efforts and more.

Not just to educated all with that kind of matter but with hope to have good professionals in system, I request to all candidates and employers to take the decisions concisely and stand on it because “Decision Skill” is one the very important factor of SUCCESS

Hello Swati,

As mentioned by you, you want to take legal action against him/her because of the offer letter acceptance by him/her. What if, in another condition, when you (employer) refuse to take the candidate after giving an offer letter, your company is ready to pay compensation to that employee?

Many organizations are hiring candidates from the campus and issuing offer letters. However, after a few days, the company's HR informs the candidate that due to problems, they will not hire them. They are not providing any compensation, and the employee is unable to take any legal action. It is essential to maintain transparency and integrity during the interview process to ensure that employees have confidence in joining your organization.

Thank you.

Regards,
Ashish

Dear All,

I agree with the views expressed above, but I wish to specify what condition is attached to an offer or appointment letter if a candidate fails to report for duty on the date stipulated. In my opinion, generally, it is mentioned that if a candidate fails to report for duty, the offer/appointment stands cancelled/withdrawn. If these facts are correct, then where lies the point to sue the candidate and vice versa. In fact, no condition can be attached to a 'NO SHOW' case. To avoid such incidents, a panel of candidates is prepared, and a chance is given to the next candidate in merit. I think until the joining of the candidate, both the employee and employer are free, and after joining, the agreement (appointment/offer letter) becomes enforceable.

Rgds,
V K Gupta

The acceptance of offer letter does not mean, a candidate became an employee but still a candidate and you don’t have any right to take any legal or formal action against any candidate, but need to be more conscious with recruitment and interview procedure.
Somya Kashyap

Hi,

To my knowledge, there is no provision in law to take action against an employee who fails to turn up on the date of joining. No-show is a regular phenomenon in every industry. If you offer 10 candidates, only 6 or 7 would turn up on the date of joining. There is no employer-employee relationship until a candidate comes on board. So, no legal action can be initiated.

Though not related to this topic, I want to mention something else as well. In BPOs, at least 5% of candidates quit within 1 or 2 months, without even submitting a resignation letter. They are considered as Absconders. In a lot of organizations, due to the volume of work, the HR doesn't bother to send formal communication to the so-called Absconders. A formal email has to be sent asking the candidate to join within 7 days before terminating his service. The termination email needs to be sent after 7 days.

Labour laws are mostly on the side of employees, and an employee can even sue an employer for terminating him without notice.

In some organizations, candidates go on to take leave for 3 or 4 days without permission and turn up on the 5th day. It is indiscipline. Still, as per the law, he cannot be terminated. Few organizations have this clause in the offer letter that if a candidate doesn't report for duty for 3 consecutive days without approval, his employment gets terminated automatically.

So it is better to put everything in the offer letter itself.

Dear Swathi,

You stated, "Also, I want to clarify one thing that we do not intend to take any legal action, but I want to know if there is any option available or not." When that's the case, why even raise the question of what options you have?

Thank you.

Thank you all for your replies. As I specified earlier, we do not wish to take any legal action, but I am treating this as a case study. I was curious to know whether there is any provision for such situations.

My key learning is that you can't do anything in NO SHOW cases. As rightly pointed out by a few members, our laws seem to be more biased toward employees. It's sad but true.

Dear Swati and others,

The discussion was on available legal options for "no show" by the job candidate. Why bring labor laws in between, take sides, and start accusing of having them on the side of employees?

My dear friends, browse this very forum and you will get 'n' number of cases of on-spot termination, non-payment of salaries, non-issuance of employment certificates, and so on. How do employers muster the courage to do all this? Obviously, the weak implementation of laws favors employers more than employees.

Swati or her management has failed to insert the penalty clause in the offer letter in case of "no show" by the candidate. Do not blame "labor laws" for their poor drafting skills. "No show" by a job candidate is not today's affair. It has been happening for a decade or so. Why then were precautionary measures not taken?

In fact, a seasoned interviewer should be able to gauge the attitude of the candidate. Dithering mentality or fickleness of the job candidate should be captured right at the interview stage itself.

Do we know anything about Swati's company's selection process, the number of rounds of selection, who took the interviews, and the competence of the interviewers, etc.? Nobody knows. Then why jump guns and train them on labor laws? Let us not sweep managerial weaknesses under the carpet of labor laws. This habit will take us nowhere.

My above post may sound as if I were some labor union leader. No way. My only point is on skirting around the issue and nothing else.

Thanks,

Dinesh V Divekar

Dear Manjerakar,

I can understand how you are feeling. You collected resumes from various sources, shortlisted them, arranged interviews, selected that candidate by refusing others, and gave an offer with the hope that the employee would join and assist the organization. And at last, you received a negative reply from the candidate you had selected. You must have invested a lot of time and energy in this process, which unfortunately did not yield the desired results.

I'm sorry to inform you that there is no law that can take action against the candidate. Regardless of whether that candidate decides to join or not, please consider writing a letter to him addressing the problems you and your organization are facing due to his decision and requesting him not to repeat the same with any other organization.

Generally, candidates of this type do not progress as good professionals.

Kind regards,
[Your Name]

All views are accepted. Few things I would like to say:

1. I don't have any hard feelings for that candidate. He is not the only candidate, and mine is not the only company that has experienced this situation.
2. My main objective behind posting this is to make our recruitment and selection process better.
3. Somebody asked me, "why bother if I don't want to take any legal action." Well, the reason is I am at an initial phase in the HR process, and there will be many more situations like this that I will have to go through. So, I want to make myself aware of the available options in every other situation. For me, it is more to add to my knowledge.
4. Mr. Dinesh's points are very much acceptable, especially the one about blaming labor law.
5. I would like to know if there is anything that I could have done to avoid this NO SHOW case, or what I can do if the same happens in the future. Maybe some changes in the matter of the acceptance letter or any clause in the offer letter, etc.

Dear Swati,

"There are so many slips between the cup and the lips." Employer and employee both are human phenomena, and as such, situations and circumstances frequently change. Employers try to bind employees, and employees want to bind employers, creating a delicate balance where they sometimes find themselves in trouble. Simultaneously, there is an issue of highhandedness by the employer towards an employee even during the first month of training, which is unpaid.

Thus, in my opinion, you can do your best, but you cannot create one rule to rigidly follow in this regard. If you impose any conditions for joining, experienced candidates may hesitate to provide written acceptance unless the offer is exceptionally acceptable.

OK

V K Gupta

Hello,

I joined my current IT company overseas 1.5 years back on an Indian Offer. I think my situation is a bit complicated, so I am describing it below.

As usual, the offer letter has the following conditions under the clause Restrictive Covenant:

1) For a period of two years after the employment, you will not directly or indirectly solicit or take up employment with any person or company during this period.

2) You shall not take up employment, directly or indirectly, with such customers on behalf of yourself or any other firms or company.

Apart from this,

They issued a deputation letter suggesting your deputation for the execution of an order received from Customer A.

There is one more condition under the clause Miscellaneous in the deputation letter:

While working on the assignment and for a period of two years after the completion of the assignment, you shall not take or do any business with customers without written permission from the company.

Now, coming to the actual part:

There is Customer B who gave a project to Customer A. Customer A outsourced some part of their work to my company. This is subcontracting work, so even though my client on the deputation letter is Customer A, I am actually working on the work given by Customer B.

Now, I have received a contract offer from Company C for Customer B. Can I accept this contract offer?

There is no other undertaking signed other than the offer letter and deputation.

Please suggest what should be done.

Thanks in advance.

Dear friends,

My view is that there is no locus standi for any labor law in this matter as there was no employer-employee relationship established. If at all, it could be tried under the Indian Contract Act. It's a breach of a promise given but the outcome, it's anybody's guess.

To my knowledge, we can't take any action against the candidate who has accepted the offer letter until we receive the joining report; at that point, he will be deemed as our employee.

Venkat

Dear Manjrekar,

Actually, many organizations are suffering from this type of irresponsible behavior of candidates. If you are talking about upgrading your recruitment procedure, it will be better to keep a candidate in queue if possible as an alternative.

Or, immediately contact the next best candidate.

Hi Friends,

I think we live in a free-market economy wherein every company has a choice to accept or reject potential candidates until the time they are on the rolls of the company.

But the same right exists with the candidates too to accept or reject a company's offer until he or she joins the company.

Instead of trying to go after such dropouts with a gun, why not try to find out why the person did not join the company?

The reasons may help your company improve on the offers the next time around.

Instead of blaming them, try to find out if there is something you can do for your organization. You could even send a feedback form to the person.

I find this whole idea of trying to prosecute a person even before he joins the company quite outlandish.

We go for test drives of a car, but we are not duty-bound to buy it.

Some ladies pull out a thousand suits/sarees in a shop yet walk out without buying one.

People date others yet they are not duty-bound to get married to every person they date.

It is definitely not right on the part of a person to walk out after accepting... but that's part of life.

Just move on.

Dear Swati,

As an HR professional, I am puzzled as to why you are choosing to retain a candidate who shows minimal interest in remaining with your organization and why you are contemplating taking legal action against him/her. In today's global market, everyone has the right to explore new opportunities, and that seems to be the case here. Mere offer letters and letters of intent do not grant you the authority to pursue legal action against an individual. However, upon their commencement of employment, you do possess the right to enforce any actions outlined in their appointment or agreement. Legal action should be considered only if the individual violates the terms of their appointment or agreement and must be executed through appropriate legal channels.

It would be more prudent to seek out another candidate who is genuinely in need of a job and is capable of serving your company effectively.

I hope this helps clarify the situation.

Best regards,
[Your Name]

Hi Swati,

“Can a company take a legal action against a candidate who accepts offer letter and reject it later? “

According to me, if company wants to take legal action in this case then they have to consider following points:

Consideration – When candidate given singed offer letter in consideration what company given him. (In most cases company give promise that if you will join on or before X date then this offer will be valid and you can join company otherwise this offer will be cancelled) You have to see offer later content what was consideration in your case.

Damage – What was the loss/Damage happened to company because of candidate rejecting offer. Proving material damage will be not so easy.

Compensation – What you want as a compensation claim. In simple term what you want from candidate/court.

Damage is directly proportional to compensation. More damage more compensation, No damage no compensation.

After analyzing your loss and compensation claim you have to see is it worth fighting? Is it worth putting time, money and effort in it? If you think yes then do not worry there are many legal eagles waiting for your case…….just inform them.

Dear White Eagle,

Thank you so much for your reply. I do not intend to take any legal action, but I wanted to explore my options. Thank you for outlining the available options and their requirements.

Hi,

I was recently selected for an organization where, in the Offer Letter, there was a clause regarding Breach of Contract. It stated that if I do not join, I will have to pay 8% of the annual CTC. I accepted the job because I liked the role, but I did express my opposition to the clause. As a candidate, I wanted to explore other opportunities that aligned with my career path. However, they did not agree and mentioned that the clause was included due to instances where individuals fail to inform or report their non-joining without prior notice.

Now, just three weeks before my scheduled joining date, I need to inform them that I wish to decline the offer as I have received an offer from my dream company yesterday. My concern is if they do not agree and I am unable to pay the specified amount, can they take legal action against me? Admittedly, signing the contract under those circumstances may be considered unprofessional, but at the time, I had no other offers and was eagerly awaiting a response from another company. Now that I have received an offer, I do not want to miss this opportunity.

Regards,
Job Candidate