Employers may come across situations where they may need to revoke an offer of employment. The revocation of an offer can be a challenging and sensitive situation for both employers and potential employees. When an offer of employment is revoked, it can have significant implications for all parties involved.
"IN THIS ARTICLE, WE WILL EXPLORE ABOUT REVOCATION OF OFFER AND LEGALITIES SURROUNDING THE PROCESS."
Under Indian laws, the terms and conditions of employment are governed by the applicable Federal and State specific employment laws. But making of an offer and acceptance thereof are governed by the provisions of the Indian Contract Act,1872 ("Contract Act"). The Contract Act defines offer as a proposal made by one person to another to do or to abstain from doing anything, with a view to obtain the assent of the other person to such act or abstinence. A proposal is accepted when the person to whom the proposal is made signifies his acceptance thereto, thus becoming a promise.
Every promise and every set of promises, forming the consideration for each other, is an agreement.
As per Contract Act, an offer can be revoked before the acceptance of offer is communicated to the proposer (employer). Similarly, an acceptance can be revoked at any time before the communication of acceptance is complete. Further, the Contract Act provides the method of revocation of offer.
Basis the aforesaid provisions of the Contract Act, if an employer provides an offer of employment and the same is accepted by the prospective employee/candidate, the consideration involved is that the candidate will be compensated for such services rendered.
Accordingly, an offer becomes legally binding once it has been accepted by the prospective employee as it forms a contract under the Contract Act. Thus, an offer of employment can be revoked or withdrawn by an employer before the same has been accepted by the prospective employee.
One vital aspect to consider here is the offer itself, whether the offer is conditional or not. When revoking an offer, it must be taken into consideration whether the offer made to the candidate was subject to certain conditions and/or was there a valid employment contract in place. There are scenarios where employers provide a conditional offer whereby if the candidate fails to satisfy conditions like, background checks, submission of past employment documents, etc., the offer may be withdrawn even after it has been accepted. In cases where no conditions are specified, such an offer after acceptance results into a binding agreement. Therefore, withdrawal of the said offer amounts to termination of employment thus making the employer liable.
"ONE VITAL ASPECT TO CONSIDER HERE IS THE OFFER ITSELF, WHETHER THE OFFER IS CONDITIONAL OR NOT."
CIRCUMSTANCES WHERE REVOCATION OF OFFER MAY BE PERMITTED
A.Revocation of Offer Before Acceptance: An employer may revoke an offer at any time before it has been accepted by the candidate. This means that until acceptance of employment is not communicated ,the offer can be withdrawn by the employer without exposure to any legal consequences. This is because offer of employment is not a legally binding contract until it has been accepted by the candidate and the same has been communicated to the employer. If an employer revokes the offer before it has been accepted, the candidate does not have any legal recourse because a valid contract had not come into existence.
B. Revocation of Offer After Acceptance: Revocation of an offer may be permitted in case the offer and/or contract of employment is subject to fulfilment of specific conditions.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
