Article: Zomato withdraws ₹1.6 Cr job offer to IIT students, sparks backlash – Where did HR go wrong

Talent Acquisition

Zomato withdraws ₹1.6 Cr job offer to IIT students, sparks backlash – Where did HR go wrong

If a job offer is rescinded, candidates have the option to take legal action against employers for damages incurred due to breached contracts.
Zomato withdraws ₹1.6 Cr job offer to IIT students, sparks backlash – Where did HR go wrong

Securing your first job is a significant leap into the real world after college. Some land jobs by applying independently, while others rely on their college's placement programs—now a prevalent practice, notably in the tech industry. It's typically considered a reliable gateway into a career, but the current scenario isn't that straightforward. We're in an era where companies are letting go of employees on a large scale, hiring has tapered, and to compound uncertainties, they're retracting previously offered job positions. This recently happened at IIT Delhi, highlighting intensifying challenges in today's job market.

Zomato recently rescinded job offers to students at the IIT Delhi campus just before the commencement of the placement season. Initially, the food delivery giant had reportedly proposed a substantial ₹1.6 crore salary for the role of algorithm engineer to these students. However, the offer was abruptly withdrawn later on.

Following this, Hrithik Talwar, a research intern at IIT Delhi, took to social media, alleging that Zomato arrived at the campus, creating excitement around an attractive job offer only to retract it afterward. Talwar shared a screenshot of a notice instructing students who had applied for the Algorithms Engineers position at Zomato to withdraw their applications.

This post quickly gained traction as students and many users expressed a mix of disbelief and curiosity. Some questioned the validity of the job offer, pondering if Zomato had indeed presented such an appealing opportunity, while others speculated that it might have been a strategic move by the food delivery giant for promotional purposes.

Has this happened for the first time? 

No, similar incidents have occurred previously.

In 2016, the Indian e-commerce company Grofers revoked job offers that had been extended to students placed on campus. Additionally, in May of the same year, Flipkart deferred job offers for approximately 15 students from IIM-A. This action led to threats from IIM campuses to blacklist Flipkart from recruiting companies.

Can companies rescind job offers?

Therefore, the critical question arises: What lessons should HR departments draw from situations like these? Let's explore whether a company can withdraw a job offer and what consequences it might entail.

Under Section 5 of the Indian Contract Act, 1872, a proposal can be withdrawn before its acceptance is communicated, constituting a breach of contract when an employer revokes an accepted job offer. Generally, once a contract is formed, it cannot be unilaterally revoked. Both parties can only be released from their obligations through mutual discharge by novation or satisfaction.

For a binding contract, acceptance and indication of the offer's acceptance are vital. In cases of mutual promises, the offeror must receive confirmation that the offeree accepted the offer and is willing to fulfil their promise. The method of communication between parties varies based on the offer's nature and the circumstances.

How should employers handle rescinded job offers? 

Legally, the employer should promptly notify the individual upon awareness. Section 6 of the Indian Contract Act outlines the requisites for revoking a contract. Communication to the other party is essential, and if there's a delay in accepting the offer, the contract can be revoked. Revocation can also occur if the acceptor fails to meet conditions precedent to acceptance.

Employers, especially the Talent Acquisition team ought to address the individual's concerns and assist in finding alternative employment, within or outside the company. Repeatedly rescinding offers can tarnish a company's reputation, making it harder to attract top talent. 

Minimising negative consequences is crucial

Lastly, HR must keep in mind that candidates have the option to sue employers for damages if a job offer is rescinded, and they suffer losses due to breached contracts. Courts can order employers to compensate if the breach is established.

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Topics: Talent Acquisition, Talent Management, #HRTech, #HRCommunity

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