23 August 2016 13:01:36 IST

A management and technology professional with 17 years of experience at Big-4 business consulting firms, and seven years of experience in high-technology manufacturing, Rajkamal Rao is a results-driven strategy expert. A US citizen with OCI (Overseas Citizen of India) privileges that allow him to live and work in India, he divides his time between the two countries. Rao heads Rao Advisors, a firm that counsels students aspiring to study in the United States on ways to maximise their return on investment. He lives with his wife and son in Texas. Rao has been a columnist for from the year the website was launched, in 2015, and writes regularly for BusinessLine as well. Twitter: @rajkamalrao

Employers, think twice before you rescind offers!

In today’s volatile business world, companies withdrawing job offers can lose a lot

With the see-saw nature of global business, it is not surprising to see companies struggling to adjust their workforce to meet changing customer demands.

Last week, the Royal Bank of Scotland, one of Infosys’ biggest customers, decided to abandon the idea of setting up an independent bank in the UK. This had an immediate ripple effect on Infosys, with nearly 3,000 positions in flux. Fortunately for the employees in question, the company said it would reassign them to other projects within the company.

But when the debate is not about an existing employee but a future worker, a different question arises. A college graduate receives an offer of employment from a company, but has not joined it yet. If business conditions change during this time, can the company renege on its offer? What legal obligations does the company have towards someone it has only made a promise to?

The short answer is that the company cannot go back on its promise if it follows global Human Resources standards. Candidates with offer letters can claim economic and emotional harm in a court of law and, at least in western countries, win relief.

A promise is a promise

According to the Society of Human Resource Management (SHRM), the legal doctrine which supports such claims is called “Promissory estoppel” — cases when a true contract does not exist. The precise legal definition, courtesy Investopedia, is self-explanatory: “Promissory estoppel is a legal principle that a promise is enforceable by law, even if made without formal consideration, when a promisor has made a promise to a promisee, who then relies on that promise to his subsequent detriment.”

This makes a lot of sense, especially in the Indian context. Placement offices at Indian institutions are notorious for enforcing a Soviet-style rule of denying students a shot at receiving more than two job offers. At most colleges, a student with two confirmed job offers is not allowed to even interview with more companies.

Placement officers have told me that this kind of restriction allows everyone a chance at securing a job — a socialistic regulation that needlessly burdens both employers and candidates. This is why companies are in a mad rush to get on a college’s placement calendar early and grab the best and brightest first.

Damage to students

When a company goes back on a job offer in such an environment, the economic and emotional damage to the candidate can be significant. The student has to settle for lower-tiered companies which come later on the placement schedule.

If the offer is rescinded after the placement season is over, the emotional harm can be unbearable. In intensely competitive college campuses, candidates have to face pressures of maintaining social normalcy while struggling to deal with the ignominy of not having a job offer.

There are other defences against such employers, although these are more remedial in nature, and happen after the rescission. Last week, news reports said 12 elite IITs met to pass sanctions against employers who deviated from their offer letters in a significant way.

Rescinding job offers is, of course, the ultimate deviation, but changing job descriptions, baiting and switching locations, or lowering compensation levels were all also deemed unacceptable. There is always strength in numbers — and there can be no greater power than when the IITs unite to make a joint statement.

Also read: IIT-B blacklists 9 firms from placements

What you can do

There are steps which students can take before blindly signing up for campus interviews.

A little research always helps. Websites such as Glassdoor are Yelp-like versions, which rate employers. Just as consumers can upvote or downvote their experiences with a company and write a fearless review on Yelp, employees rate the pros and cons of thousands of companies all over the world on Glassdoor.

If revoking job offers or treating employees poorly appear on the list of cons, aspiring candidates must shun a company and refuse to talk to it. Potential employee boycotts will send a powerful message and the company will be forced to mend its ways — the last thing a company wants is to lose out on the chance to hire good talent.

There is also the power of public opinion. Companies do not want their names to be in the media unless they are cast in good light. If word gets around that an employer is unafraid to renege on a job offer, it can spell a death knell because very few candidates will consider working for a company with such a bad reputation.

Getting around rescinded offers

If you are the victim of a rescinded offer, try and work with the company in good faith to see if you can negotiate a compromise. Perhaps the company will allow you to undergo training at a third-party institution and reimburse you the cost once you join it at a later date. Or the company is ready to refer you to another arm where you can temporarily work and return after the dry spell ends.

No matter what you do, try not to bad-mouth the company on social media or in the press. Companies take severe exceptions to anyone who harms their name, even if the underlying charges are true.

After all, no one likes their dirty clothes laundered in public.