4 ms·
> cut all employee salaries by 10% across the board How does that work exactly? I imagine you're presented with a contract that says "you salary is now <previo
by tomp 7y ago
> cut all employee salaries by 10% across the board
How does that work exactly? I imagine you're presented with a contract that says "you salary is now <previous salary 0.9>"* and you're also told (or heavily implied) that if you don't sign, you're fired.
Surely the employer can't just start paying you less than specified in your original contract? And maybe if you don't sign, you're owed some benefits (but who wants to be jobless going into pandemic+recession+inflation)?
- scandox 7y agoYes they just say take pay cut or we make you redundant because we cannot afford you.
- mnw21cam 7y agoIf you have evidence that the redundancy is a direct result of you not taking a pay cut, then it's illegal and you can take them to a tribunal. It still happens though.
- mnw21cam 7y agoYes, if you decide not to sign the new contract, and they fire you because of it, you can take them to tribunal for it. It's illegal.
- barbegal 7y agoIANAL but it's not always illegal. If a company has a choice between going bust and imposing pay cuts on everyone then that is perfectly legal.
- memsom 7y agoIf they follow the procedure in the UK, they can do this AFAIK. Though, they might need to make the position redundant and offer another position at a lower wage. Either way, it's a contract change.
- Silhouette 7y agoClaiming someone is redundant and then hiring someone else to do essentially the same job, but on worse terms and probably with a different job title or other deceptions to try to disguise what you're really doing, is a trick as old as the sun. UK employment lawyers and tribunals are likely to laugh you out of the building with an expensive lesson if you try it.
- pinkfoot 7y agoNoone does that. What large companies do is hold a large minority stake in their group companies. Then they shut down the 'programme' in one company and move it, modulo some cosmetic changes, to another group company. Bitter experience.
- Silhouette 7y agoIndeed. Larger businesses in the UK do have additional obligations when it comes to redundancies, but the system isn't perfect, for sure.
- Silhouette 7y agoCitation very much needed. I have never seen anything in UK employment rights law that says "unless the employer is in trouble". If the business is in danger of going bust because it can't afford to keep people on then it may need to make some of them redundant (and redundancy rights will then apply), but that's totally different to unilaterally changing the contractual terms of employment for the worse.
- barbegal 7y agoI believe s.98(1)(b) of the Employment Rights Act 1996 [1] allows dismissal for "some other substantial reason" which could be argued to cover this scenario and there is some case law such as Garside and Laycock Ltd v Booth [2] [1] http://www.legislation.gov.uk/ukpga/1996/18/section/98 http://www.legislation.gov.uk/ukpga/1996/18/section/98 [2] https://www.bto.co.uk/blog/refusing-to-accept-a-wage-cut-%E2%80%93-is-it-fair.aspx https://www.bto.co.uk/blog/refusing-to-accept-a-wage-cut-%E2...
- Silhouette 7y agoThanks for the interesting source material. It appears that the case in question has not yet been definitively resolved, though, and the argument made would contradict almost everything many employment lawyers have been advising for a long time about the implications of the ERA in this area. Notably, that includes a lot of advice given during the previous financial crisis just over a decade ago, when similar questions were widespread. The conventional legal wisdom seems to have been that mandating a pay cut is not allowed, because it's not a permitted deduction from wages and it's likely a breach of contract, and that firing someone just for refusing is not allowed either, because any decisions about who to let go if the business is in financial trouble are a separate matter that should be made objectively. That would mean without reference to the refusal by any given employee to accept worse terms of employment, and without conflating a position that might now be redundant with any employee currently holding that position who might also be able to work elsewhere in the business instead.