It's important not to read too much into this decision. Employers are allowed to reduce pay, just if the employee chooses to leave as a result of that, then it

It's important not to read too much into this decision. Employers are allowed to reduce pay, just if the employee chooses to leave as a result of that, then it's legally treated as if the employer fired them. Normally, that would just mean that the employee would qualify for unemployment benefits and the employer's unemployment insurance premiums might increase by a trifling amount. In this case, the employee had a contract guaranteeing severance pay, so the employer also was liable for that.