What is Appointment letter?
The appointment letter or new joining letter, is an official document that is issued by the employer to their new joinees once they had accepted the job offer. An appointment letter sets out the terms and conditions of employment, which includes designation, workplace, job profile, leave policy, attendance policy, exit & termination policy, CTC salary details, confidentiality, etc. A well-drafted appointment letter is critical as it may contain elements to respond to the probable issues that may arise between employer and employee during the course of employment.
What is the difference between offer letter and appointment letter?
Both the documents play an important part in the recruitment cycle. If the company finds that the candidate is suitable for the company an offer letter will be provided, in which the details mentioned in the position and salary offered by the company.
An appointment letter is provided after the candidate accepts the offer letter. So this appointment letter is a document that guarantees a job to the candidate with terms and conditions mentioned in an appointment letter. If a candidate who successfully completes and clears all the rounds of interviews and also if a candidate is satisfied by the criteria determined for a potential candidate then he or she is regarded as a suitable candidate for the company.
After clearing all his rounds the company will provide officially a letter known as offer letter which will include the date of joining, salary package and position offered sometimes some companies may offer medical benefits that the company is offering. And after offering an offer letter company will ask to submit the necessary documents and certified copies and now this is the time that the candidate should decide that he is going to accept this offer or not.
On the other hand, an appointment letter which indicates the very next step process after an offer letter, if the candidate happily accepts the offer letter and submit all the documents for verification an appointment letter will be offered.
What are the elements to covered in Appointment Letter?
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The full name of the employee as per Aadhaar card with permanent address of the employee. This info will serve for future audit purposes,
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Designation and work location based on the organizational set up of the company. Transfer of work location should be clearly mentioned, as it's in the right of the company,
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Salary details with all fixed and variable allowances along with statutory compliance contributions. Also include if any, annual bonus and benefits provided to employee as per the company policy,
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What will be the Probation period, its extension, confirmation and exit policy,
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Training period should also be mentioned with details regarding the nature of training to be provided,
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Terms of employment period with age of retirement,
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Leave and attendance policy of company. Leave encashment policy if any followed by company,
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Confidentiality clause restricting the employees not to divulge the confidential and proprietary information of the company to any third party, including the trade secrets, business plans, customer information and business or company information,
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Termination clause setting out the various reasons for termination like, for breach of employment terms, indiscipline or non performance, etc,
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Consequences of termination should clearly provide for the action steps to be completed immediately upon a termination/resignation of the employee, like handover of company property, etc,
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Medical examination by a registered medical practitioner is sometimes a prerequisite to confirming the employment in certain companies and that should be clearly provided for,
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The appointment letter should also refer to the company policy document and the candidate should be made to agree to adhere to all the service conditions mentioned therein,
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The reference to the conduct of employee should be made and be clearly indicated that any misconduct/fraud during the course of employment would make the employee liable for suspension/dismissal from the services,
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The letter should put an obligation on the employee to inform the Company in case it has any conflict of interest in any area of operation or project and shall refrain from performing services for such conflicting area,
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The appointment letter should also contain a clause asking employees to neither directly nor indirectly compete with the business of the company during the term of the employment.
Is it mandatory to issue appointment letter to every employees?
The appointment letter is an official document that is issued by the employer to their new joinees once they had accepted the job offer. This document is basically an agreement which is to be mutually signed between by both parties(Employer and Employee).
Mandatory issuance of appointment letter is a requirement under the Occupational Safety, Health, and Working Conditions Code, 2019. This Code was introduced in the Lok Sabha on 23 July 2019. It was then referred to the Standing Committee on Labour on 7 October 2019. The Committee has submitted its report on the said Code on 11 February 2020. The Code is pending to be passed by the Lok Sabha and is not in force yet. Once this code is passed by the central government, then for every employer the issuance and maintaining signed acknowledge copy(employee and employer) of the Appointment letter will become mandatory.
There is no prescribed content for an appointment letter. It is up to each employer to determine the information that they wants to cover in appointment letter. If you are not sure where to start, then PayHR provides you with pre-filled appointment letter format. You will have to make few modification which is highlighted in the file.
Zip file contains two appointment letter format:
1. Simple Appointment Letter format: This format best suitable for Startups where employee overhead is minimum and company wish not to impose strict guidelines to there employees.
2. Detailed Appointment Letter format: This format best suitable where management wish to adopt strict guideline as per requirment under various statutory compliance act.
