Can employer make me take a 20% wage cut?

davo2001

Hi,

Employed by a large phara multinational on a permanent basis for a number of years.

We have all been asked to take a 20% pay cut (while working the same amount) due to "global issues".

We are not part of a union, can they make us do this?

GerardKeating

davo2001 wrote: »

We have all been asked to take a 20% pay cut (while working the same amount) due to "global issues".

They can "ask", but any such reductions are voluntary and you have to consent to them.

Has your organisation taken a financial hit due to the "global issues".

Tiddlypeeps

It's likely their next step will be to issue redundancies, and likely anyone who didn't accept the 20% pay cut will be on the chopping block. If you feel you would be difficult to replace and bring a lot of value to the company then you are probably pretty safe to refuse the pay cut. If not then you need to weight up would you rather have this job at 80% pay or find a new job, and that will probably depend on how the job market in your sector is right now and if you could even manage with a 20% pay cut.

AmberGold

Difficult one but I'd accept a pay cut if it helped them ride this out, for certain I wouldn't like to be the one opposing it.

Seve OB

The short simple answer to your question is no, they cannot make you take the cut.

antimatterx

I for one will not be taking a pay cut if it's introduced. If I don't get my pay rise in June, I'll hunting for a new job.

davo2001

Thanks all, tbh, i'm not all that worried, have good savings and redundancy (if it came to that) would be a lot extra. Confident enough i'd get another job anyways (yes even in this climate).

I'll mull it over.

Outkast_IRE

Name me one multinational pharma company that has taken a serious hit from the current crisis ? Most have orders way up on last year due to Brexit stockpiling and now medical purchasing is up in general from increased expenditure in every government hospital in the world

Without knowing company particulars I would suggest it's possible some gimp CEO/ upper management has seen the share price take a hit and needs to demonstrate to shareholders he is cuthroat enough to keep the job.

In your scenario I wouldn't contemplate it for a second . There are loads of pharma jobs out there for those with experience . Try and get voluntary redundancy and leave with that . I know 40 year olds with mortgages paid off from the above scenario in pharma companies

LuasSimon

I know of a company with 5 factories . Had came out seeking a 20 % pay cut for staff over Covid although it’s hard to see how it’s impacted the business , 2 of the factories are unionised and wouldn’t accept it so they’ve ditched the reduction in those 2 but implementing it in the 3 non unionised factories.

cannotlogin

Employers cannot force it but if they are unable to secure agreed cuts, the most likely next step will be having to let people go.

While I wouldn't like to take a cut either, it's far better than the alternative.

The unemployment rate is now 17% and the level of alternative jobs available in the economy is at a serious low.

Dav010

antimatterx wrote: »

I for one will not be taking a pay cut if it's introduced. If I don't get my pay rise in June, I'll hunting for a new job.

They can temporarily lay you off. That’s €350 per week compared to what you are being paid now/after pay cut. I know which one I would choose.

Dav010

LuasSimon wrote: »

I know of a company with 5 factories . Had came out seeking a 20 % pay cut for staff over Covid although it’s hard to see how it’s impacted the business , 2 of the factories are unionised and wouldn’t accept it so they’ve ditched the reduction in those 2 but implementing it in the 3 non unionised factories.

No doubt if there are to be lay offs, which two factories will be chosen.

Outkast_IRE

cannotlogin wrote: »

Employers cannot force it but if they are unable to secure agreed cuts, the most likely next step will be having to let people go.

While I wouldn't like to take a cut either, it's far better than the alternative.

The unemployment rate is now 17% and the level of alternative jobs available in the economy is at a serious low.

This is multinational pharma next stage is voluntary redundancy, I would take the risk there is massive payouts to be had.

And the 17% unemployment is not distributed in all sectors the likes of pharma often bypass these ups and downs altogether cause the demand for their products is not a luxury it is a neccessity.

Now if the company is producing only Botox then obviously the hit is bang on the nose but for most other products it's business as usual.

DaraDali

If I was asked to take a 20% paycut and Hrs cut if its in my contract do I have to take it?

Contract says they reserve the right to reduce my pay and hrs.

Full Time Permanent btw

callaway92

I'd accept the pay cut in lieu of a basis that I'd receive the money I've lost out on in the future when the company starts making large profits again, ie even when I get back to my normal wage (which you don't know when that will be), that you should also be receiving the extra lost money back too.

Dav010

DaraDali wrote: »

If I was asked to take a 20% paycut and Hrs cut if its in my contract do I have to take it?

Contract says they reserve the right to reduce my pay and hrs.

Full Time Permanent btw

If contract says they can do that based on business needs, then that is what you agreed to.

Victor

How is the business doing generally?

This might be them settings things up to manipulate the value of any redundancy payments.

Consider asking for a share incentive - share prices are generally low(er) at the moment. "Give me a year's salary in shares (up front) in return for a 20% pay cut.

banie01

I've heard also of an Irish single site medical devices MNC asking their management, admin and no-production teams asking staff earning above a certain level to take a similar 20% cut.
Already in place across execs and similar roles in the US and other regions.

Production is continuing, a buffer of WIP and completed product is already in place and warehouse/distribution centre is nearing capacity and it is an essential service.

While capacity remains at this plant, and indeed many around the country/world for other manufacturers.
A serious and growing issue is the availability of raw materials.
Many pharmaceutical and med device raw material supply chains are starting to encounter delay due to the Wuhan lockdown that will take time to overcome.

Jim2007

Outkast_IRE wrote: »

Without knowing company particulars I would suggest it's possible some gimp CEO/ upper management has seen the share price take a hit and needs to demonstrate to shareholders he is cuthroat enough to keep the job.

Exactly, without knowing......

The short term outlook over say the next six months looks OK, but after that... some will face very serious challenges in terms of trying to get their hands on raw materials, export restrictions, poor pipelines, government wartime production directives etc....

I would not be at all surprised in Irish pharma employers dependent on imported raw materials are facing redundancies in next two years or so.

Seve OB

callaway92 wrote: »

I'd accept the pay cut in lieu of a basis that I'd receive the money I've lost out on in the future when the company starts making large profits again, ie even when I get back to my normal wage (which you don't know when that will be), that you should also be receiving the extra lost money back too.

I think that’s a fair compromise, but just hope they do get back up and running again and don’t do a Debenhams!

Augme

Dav010 wrote: »

No doubt if there are to be lay offs, which two factories will be chosen.

Yea, the non-unionised one.

salonfire

Augme wrote: »

Yea, the non-unionised one.

Why would a company choose to close the cheaper non-unionised one and keep the more expensive unionised one?

LeBash

Take the cut, if you feel its genuine, ask at what point it will go back up accept it and you have a job when a lot of people are out of work. If you feel its taking advantage, then still take it but start putting the CV together.

Without knowing how long this will go on for, the main thing is you have a weekly/monthly income. 350 a week would suck to live on if you have loans etc.

I think there will be a lot of people in similar boats pretty soon, some are in worse ones and others will be in dire debt very shortly.

I wouldnt weigh up what a redundancy would be worth unless you have a job banked.

Hopefully it works out for you.

James 007

If accepting the pay cut or not accepting I would throw in the line your company has classed you as an 'essential worker' but with you coming to work there is a higher risk of you picking up this serious disease, a disease with no current vaccine, a disease that you could transfer to another member of your family.

You really probably need to see the hard production figures, how has the company being affected, is it due to supplies, lost markets, employees isolating or absent therefore loss of employees.

If its across the board everyone getting a 20% paycut, & the company is only down 5-10% production I think you as a group could all rally together, go public with it, the company wont want a bad name during this pandemic. Maybe a bit over the top, if so go it alone but face the consequences.

Dav010

James 007 wrote: »

If accepting the pay cut or not accepting I would throw in the line your company has classed you as an 'essential worker' but with you coming to work there is a higher risk of you picking up this serious disease, a disease with no current vaccine, a disease that you could transfer to another member of your family.

You really probably need to see the hard production figures, how has the company being affected, is it due to supplies, lost markets, employees isolating or absent therefore loss of employees.

If its across the board everyone getting a 20% paycut, & the company is only down 5-10% production I think you as a group could all rally together, go public with it, the company wont want a bad name during this pandemic. Maybe a bit over the top, if so go it alone but face the consequences.

Maybe a bit over the top?

In all honesty, considering what is going on, do you think a company is going to worry about getting a “bad name” for wage cuts during the current crisis? Personally, I think you would be told PFO once you walk into the office and start asking for sensitive information about costs and production problems.

Seriously, less of the keyboard warrior stuff and more of reality might help the op. A quick search of effect of covid 19 on pharma shows that a large percentage of ingredients come from China & India, two countries in lockdown currently/recently and there are supply chain and transportation problems worldwide.

Dav010

Dav010 wrote: »

They can temporarily lay you off. That’s €350 per week compared to what you are being paid now/after pay cut. I know which one I would choose.

If you accept the pay cut it’s permanent.

OP, don’t take this too easily even if you’re going to take it. There’s far too many people who would lie down to be talked on by companies but this lot will still be making plenty and are just chancing their arm. Stick it out and get the big payoff if you need to.

iwillhtfu

ReginaldSmythV wrote: »

If you accept the pay cut it’s permanent.

OP, don’t take this too easily even if you’re going to take it. There’s far too many people who would lie down to be talked on by companies but this lot will still be making plenty and are just chancing their arm. Stick it out and get the big payoff if you need to.

Not if the duration of the said pay cut is clearly defined. OP I'd ask about a pay deferral as opposed to a pay cut, this should see you recover lost monies in the future. To be fair if the cut is only for a quarter it wouldn't be the end of the world and it's probably off of your gross pay.

iwillhtfu

iwillhtfu wrote: »

Not if the duration of the said pay cut is clearly defined. OP I'd ask about a pay deferral as opposed to a pay cut, this should see you recover lost monies in the future. To be fair if the cut is only for a quarter it wouldn't be the end of the world and it's probably off of your gross pay.

If you take a cut, whether it be “temporary” or called a deferral, you’ll never see it again and never be back on your proper wage. They need to fight it or take the redundancy, especially in a field where you can get a job by just standing outside somewhere for too long. No point in being walked on when you’ve options.

iwillhtfu

ReginaldSmythV wrote: »

If you take a cut, whether it be “temporary” or called a deferral, you’ll never see it again and never be back on your proper wage.

That's simply not true, I don't know how else to put it. By all means OP fight it if you wish but personally if there was talk of layoffs for junior staff and they were proposing the cut across the board I'd take it but under certain conditions. Also FYI just because you're not in a union doesn't mean you can't join one now and ask advice.

fungie

I had to take a 30% pay cut from a software company. We weren't given an option but rather were told via letter.

sgthighway

Very few Pharma companies in Ireland are stuck for cash. If they cut your wage by 20% you should be working 20% less and you should be using Covid welfare to make up the shortfall.