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An appointment letter intimates the prospective employee of the basic terms and conditions of his employment, including his designation, date of joining, annual CTC (cost to company), reporting manager, etc.
An appointment Letter often acts as a cover letter to the employment contract and gives the prospective employee a broad overview of the designation and benefits being offered to him.
Frequently Asked Questions
1. Is the appointment letter binding on the employer? / Can a prospective employee sue a person on the basis of the appointment letter alone?
An appointment letter alone is usually not binding on the employer or prospective employee as it does not constitute a valid contract between the parties and is used to express the intention of the employer to enter into a separate employment agreement.
2. Is there any restriction on companies to issue an appointment letter?
There are no specific restrictions placed on the issuance of appointment letters by a company. However, while appointing a director or key managerial personnel, the company should ensure that the provisions of the Companies Act 2013 are duly complied with.