Can employer make me take a 20% wage cut?

McGiver

OK here is the deal.

Employer announced a global pay cut due to "predicted sales in next quarter". March numbers were OK.
Now, HR sent letter with the reduced salary value to all employees. Didn't ask for consent, just plainly said, this is the new salary.
I believe this is illegal, because it is a change of terms of employment and they have to seek consent of the employees. Both parties have to agree in such a situation AFAIK.

Bandana boy

You could refuse , but I suspect you will be immediately furloughed ,hours cut to zero and have to avail of the Covid payment.
Eventually though they would have to reinstate you or make you redundant.

If you think your future is not with this company and you are attractive to other companies to hire heading into a potential depression then hold your ground and refuse.they would be walking on tricky ground if they made you redundant and hired a cheaper replacement.

Would you qualify for redundancy ? , have they paid higher than statutory before ?

witchgirl26

Strumms wrote: »

If an employer asked me to take a percentage wages hit in these circumstances and btw there is no fûcking way I’m taking a 20% hit for starters but if they said help us out and take 10-15% Id be wanting the following provided in writing....

1) the previous three years financial results to justify it.

You do realise the current climate we're in right? Last 3 years financial results could have been wiped out depending on what the business is. Hell the ones for December 2019 mean nothing now.

Strumms wrote: »

2) ‘documented’ projected sales figures for this year in light of the health crisis and a comparison with last years. If they expect to be 10% down and the employees are being asked to take 20% in cuts ? NO, not happening..

Thing is no one can really give you this at the moment. I mean it's one thing if your company is still solvent after this but they don't know if any of their customers will be or what their position will be in relation to purchase power once normal business resumes.

Strumms wrote: »

3) written guarantees that the following financial year I’m getting my wages restored with an extra % on top.

Again no way that a company could guarantee this at the moment. Whatever about wage restoration, demanding an extra % on top will not happen.

Strumms wrote: »

4) if they expected to get hit 10% we take 5% with the guarantee pay is restored within a year followed by x% increase.

They may expect a 10% reduction but that's based on current projections. Things are changing so rapidly day to day in some industries that those predictions could be well off by the end of the week. Again no business is going to guarantee increases when they don't know if they'll have a business in a few months or what the economy will be like.

Strumms wrote: »

If I’m a car salesman... I make 40,000 a year and keep 5% of revenue I sell.. together that’s an annual gross income say 50,000 euros, I bust my hump to sell sell sell, every technique and trick in the book, I kiss more ass than the owner of a donkey sanctuary...I like the job, the company, the money.... if the incentive is withdrawn... the employee who was hard working, who to going over and above was the daily standard, who was incentivized by all the above might just turn....

The early starts to meet a potential client before they need to be in work ? Nope.. hey contract says 9-5

The trip to the UK that is needed for training on a Saturday, your day off ? Yes I know I went last year, ‘I’ was flexible, now I’ve something on, family, sorry.

There's an element of cutting off your nose to spite your face here with all this. Look the reality is for some companies, a wage cut for employees on a temporary basis will increase cash flow and allow the company to potentially remain solvent for longer and tried to ride this extremely sudden economic downturn out. Yes there may have to be some give on the employees side but in some circumstances it's give this little bit and have a job or stick your boots in the mud, the business goes under & you're left with what exactly?

I was asked to take a temporary reduction in pay for a few months. Those who are working in the office (& therefore at home) were asked to take it whereas as those customer facing roles who are still working weren't asked to take any. I know my industry and the struggles its currently facing so I signed the letter and agreed.

I do know someone who refused but rather than for the reasons above, it was for personal monetary reasons due to timing. The company is working with them for a solution that suits all. I don't think they'd work with someone with your attitude though. Whats in it for the company after all?

_Brian

Strumms wrote: »

A predictable response but unfortunately that wouldn’t meet the criteria. There has to be a demonstrated and fair process as regards WHO gets selected. If I met that, happy days, I’d have found myself having to say toodles to a company who I didn’t respect and I’d be xxxxx thousand the richer. I never did meet so many as a single HR person who I trust.

Oh my you need to be sitting in a meeting deciding who gets redundancy. First thing on the table are all the old wounds to be settled. It’s easy to select targets and amend criteria to fit.

I was so put off by sitting in these meetings as a manager that I applied for voluntary redundancy the next round.

McGiver

Bandana boy wrote: »

You could refuse , but I suspect you will be immediately furloughed ,hours cut to zero and have to avail of the Covid payment.
Eventually though they would have to reinstate you or make you redundant.

If you think your future is not with this company and you are attractive to other companies to hire heading into a potential depression then hold your ground and refuse.they would be walking on tricky ground if they made you redundant and hired a cheaper replacement.

Would you qualify for redundancy ? , have they paid higher than statutory before ?

I'm specifically focusing on the point that they have not asked. Just stated - here is the new pay. My understanding is they should seek consent. Absence of a refusal does not equal consent. I believe active consent is legally required.

Augme

At the end of the day if the OP is very good at their job they definitely refuse to take a cut but make sure you don't tell anyone that you refused. For any large multinational company there is a large amount of useless to average workers who will be first on a chopping block when it comes to handing out redundancies. And well run organisations will only be delighted to get rid of those even if they have taken a 20% pay cut.

If you don't think you are particularly useful are important to an organisatiin then it might be worth considering the 20% pay cut.

Also realise that management/HR will take note of the people who said yes to a pay cut. They will be viewed in a less favourable fashion and will be exploited at all costs further down the line in all pay negotiations etc.

Hoboo wrote: »

And as a HR director you'd be first on the redundancy list.

As a HR director you won't actually get any say in that.

skallywag

You cannot be forced to take a pay cut usually, it must be voluntary.

That said, prepare to be fired either immediately, or at the next available opportunity, if you decline. I have seen this happen, the employee was shell shocked when he realized he had no comeback afterwards.

JDxtra

Office based companies with staff working from home should be extremely grateful that staff are in fact able to work at all. These staff are going above and beyond already. It’s much harder to work from home for many (no dedicated space, others in the home, children off school etc).

Maybe these companies should offer staff reduced working hours in return for a matching pay cut?

Everyone should consider their own circumstances if a company wants them to take a pay cut. If it’s a genuine company that respects its employees and needs a little help – it is worth doing.

You can't be singled out and made redundant for not taking a suggested pay cut. Keep a record of all converstations and communications in case things go pear shaped.

skallywag

JDxtra wrote: »

Maybe these companies should offer staff reduced working hours in return for a matching pay cut?

This is happening to a degree.

E.g. there are companies giving more paid vacation in exchange for a 'voluntary' reduction in salary. Depending on your own situation this can actually work out quite nicely.

JDxtra wrote: »

You can't be singled out and made redundant for not taking a suggested pay cut

A company certainly cannot approach an individual, and only them, to take a pay cut. If on the other hand everyone is asked to do so, for the sake of the survival of all jobs, then that employee is clearly finished in that position if they refuse.

I encountered an identical situation some weeks back where one employee out of a few hundread refused the paycut, and was fired the next day. He went immediately to his lawyer and also to the local relevant employment law authority, and was shocked to find out that he had pretty much not even a weak leg to stand on under such circumstances.

JDxtra

skallywag wrote: »

I encountered an identical situation some weeks back where one employee out of a few hundread refused the paycut, and was fired the next day. He went immediately to his lawyer and also to the local relevant employment law authority, and was shocked to find out that he had pretty much not even a weak leg to stand on under such circumstances.

Sorry but I find that story hard to believe without additional information.

skallywag

JDxtra wrote: »

Sorry but I find that story hard to believe without additional information.

What type of additional information would you like?

The employer brought everyone together and outlined in no sugar coated terms that the company would not survive without these measures, and pleaded with the full staff to take a paycut. All (around two hundread) signed up, bar one. He was subsequently canned immediately the next day, and went off cock sure to get legal advice. He was told that under such circumstances that he had practically no chance or persuing any successful claim, particularly in the current climate.

It all sounds perfectly reasonable to me.

witchgirl26

JDxtra wrote: »

Office based companies with staff working from home should be extremely grateful that staff are in fact able to work at all. These staff are going above and beyond already. It’s much harder to work from home for many (no dedicated space, others in the home, children off school etc).

Maybe these companies should offer staff reduced working hours in return for a matching pay cut?

I think most employers are offering a little bit of understanding when it comes to people working from home. I know mine doesn't expect people to be working their standard hours but are happy if they're getting their work done.

As for being grateful - yes and no. I mean companies shouldn't be grateful that their employees are turning up to work. They pay them and in exchange, workers....well work. A lot of companies have had to go to some expense to get people able to work from home (laptops, screens, software, headsets for calls etc) that maybe they weren't planning on.

I do believe there should be give & take between employees and companies.

JDxtra wrote: »

Everyone should consider their own circumstances if a company wants them to take a pay cut. If it’s a genuine company that respects its employees and needs a little help – it is worth doing.

You can't be singled out and made redundant for not taking a suggested pay cut. Keep a record of all converstations and communications in case things go pear shaped.

I know of a company who asked employees to take a pay cut. Fairly reasonable one. One person didn't want to sign to take it due to personal circumstances and spoke to their manager about it and their reasoning. It went to the head of HR and the CFO for consideration and they were ok with that individual due to very particular circumstances not taking the cut. However I think the way the individual approached it went a long way towards that.

They may not make the role redundant but you're not going to get the same opportunities in that company again if you're the only one refusing a pay cut without real reasoning behind it given the current economic climate and the severe pressure a lot of businesses are under.

Seve OB

skallywag wrote: »

What type of additional information would you like?

The employer brought everyone together and outlined in no sugar coated terms that the company would not survive without these measures, and pleaded with the full staff to take a paycut. All (around two hundread) signed up, bar one. He was subsequently canned immediately the next day, and went off cock sure to get legal advice. He was told that under such circumstances that he had practically no chance or persuing any successful claim, particularly in the current climate.

It all sounds perfectly reasonable to me.

he went to the wrong person for advise so

skallywag

Seve OB wrote: »

he went to the wrong person for advise so

Perhaps so, but it was definitely the clear message that he received from both his lawyer/solicitor and also an employment law agency he then subsequently spoke to.

If a company can demonstrate that they genuinely need to reduce salaries by a reasonable amount in order to keep the business afloat, then it is apparently extremely unlikely that they will be on the right side of any ruling, in this particular climate, if they refuse and are subsequently let go.

If you know where advice contrary to that can be obtained then please pass the contact onto me, he will only be too glad to call them.

McGiver

McGiver wrote: »

I'm specifically focusing on the point that they have not asked. Just stated - here is the new pay. My understanding is they should seek consent. Absence of a refusal does not equal consent. I believe active consent is legally required.

Can someone advise on this?

bucketybuck

Strumms wrote: »

If an employer asked me to take a percentage wages hit in these circumstances and btw there is no fûcking way I’m taking a 20% hit for starters but if they said help us out and take 10-15% Id be wanting the following provided in writing....

1) the previous three years financial results to justify it.

2) ‘documented’ projected sales figures for this year in light of the health crisis and a comparison with last years. If they expect to be 10% down and the employees are being asked to take 20% in cuts ? NO, not happening..

3) written guarantees that the following financial year I’m getting my wages restored with an extra % on top.

4) if they expected to get hit 10% we take 5% with the guarantee pay is restored within a year followed by x% increase.

I've seen you posting in this forum before and its always been clear that there is a serious chip on your shoulder, but that right there is just hilarious.

skallywag

McGiver wrote: »

Can someone advise on this?

In my own experience a document needs to be signed any time that salaries have been cut.

Seve OB

skallywag wrote: »

Perhaps so, but it was definitely the clear message that he received from both his lawyer/solicitor and also an employment law agency he then subsequently spoke to.

If a company can demonstrate that they genuinely need to reduce salaries by a reasonable amount in order to keep the business afloat, then it is apparently extremely unlikely that they will be on the right side of any ruling, in this particular climate, if they refuse and are subsequently let go.

If you know where advice contrary to that can be obtained then please pass the contact onto me, he will only be too glad to call them.

Have a read here And tell your mate to go to the WRC


https://www.citizensinformation.ie/en/employment/employment_rights_and_conditions/contracts_of_employment/being_asked_to_reduce_your_hours_of_work.html

fungie

skallywag wrote: »

In my own experience a document needs to be signed any time that salaries have been cut.

We were given a document signed by CEO informing us of salary cut. There was no option to agree (or disagree).

fungie

fungie wrote: »

We were given a document signed by CEO informing us of salary cut. There was no option to agree (or disagree).

There’s always the option to do around 40% less work though.

ReginaldSmythV

ReginaldSmythV wrote: »

There’s always the option to do around 40% less work though.

That's if you get everyone to agree to do the same or the one black sheep faces being targeted my management.

IN some work environments you have the ass lickers and those who think it's their own company and won't do anything to upset management and will gladly bend over any time for the Company, in other words, "Company People"

Management sometimes like to create a divide and conquer environment having People against each other so no one sticks together.

Sure you can do less work but it requires being clever.

PCeeeee

skallywag wrote: »

What type of additional information would you like?

The employer brought everyone together and outlined in no sugar coated terms that the company would not survive without these measures, and pleaded with the full staff to take a paycut. All (around two hundread) signed up, bar one. He was subsequently canned immediately the next day, and went off cock sure to get legal advice. He was told that under such circumstances that he had practically no chance or persuing any successful claim, particularly in the current climate.

It all sounds perfectly reasonable to me.

On what grounds did the individual lose their job?

skallywag

PCeeeee wrote: »

On what grounds did the individual lose their job?

Not sure what the exact terms were, just know he was canned immediately more or less. I should see him again soon and will try to find out more from him.

salonfire

tdf7187 wrote: »

Yes they can, they can cut your wages by more 20% if they feel like it.

Perhaps youse will learn your
lesson and set up a union (cue screams of outrage from the usual right wing neo-liberal brigade).

Why, is there a Union out there that's found the cure to the pandamic, and thus making all businesses viable again with lots of customers?

salonfire

Strumms wrote: »

If an employer asked me to take a percentage wages hit in these circumstances and btw there is no fûcking way I’m taking a 20% hit for starters but if they said help us out and take 10-15% Id be wanting the following provided in writing....

1) the previous three years financial results to justify it.

2) ‘documented’ projected sales figures for this year in light of the health crisis and a comparison with last years. If they expect to be 10% down and the employees are being asked to take 20% in cuts ? NO, not happening..

3) written guarantees that the following financial year I’m getting my wages restored with an extra % on top.

4) if they expected to get hit 10% we take 5% with the guarantee pay is restored within a year followed by x% increase.

If I’m a car salesman... I make 40,000 a year and keep 5% of revenue I sell.. together that’s an annual gross income say 50,000 euros, I bust my hump to sell sell sell, every technique and trick in the book, I kiss more ass than t
he owner of a donkey sanctuary...I like the job, the company, the money.... if the incentive is withdrawn... the employee who was hard working, who to going over and above was the daily standard, who was incentivized by all the above might just turn....

The early starts to meet a potential client before they need to be in work ? Nope.. hey contract says 9-5

The trip to the UK that is needed for training on a Saturday, your day off ? Yes I know I went last year, ‘I’ was flexible, now I’ve something on, family, sorry.

Seems like an awful lot more work and research required on your side. And we know how you feel to be taking on extra work at the best of times.

But to do all this extra work, while a pay-cut is looming over you? Must be desperation, why not just walk out the door instead.

rock22

Hoboo wrote: »

And as a HR director you'd be first on the redundancy list.

You do realise, as a HR Director, that there are laws governing selection for redundancy ?

rock22

rock22 wrote: »

You do realise, as a HR Director, that there are laws governing selection for redundancy ?

Would any company stick to them or face any repercussions for not sticking to them? Not a chance.

kennethsmyth

skallywag wrote: »

What type of additional information would you like?

The employer brought everyone together and outlined in no sugar coated terms that the company would not survive without these measures, and pleaded with the full staff to take a paycut. All (around two hundread) signed up, bar one. He was subsequently canned immediately the next day, and went off cock sure to get legal advice. He was told that under such circumstances that he had practically no chance or persuing any successful claim, particularly in the current climate.

It all sounds perfectly reasonable to me.

Sounds perfectly like an unfair dismissal to me with a possibility of the employer being on the hook for up to 2 years worth of salary. This isn't America, if an employer reduces someones wage without consent.
1. Leave and employee has a case for constructive dismissal
2. Breach of contract case
3. Labour relations

There was a 4th which was a 1991 act but a court case created a precedent that this act related to deductions from wages not reductions so this act cannot be used anymore.

kennethsmyth

ReginaldSmythV wrote: »

Would any company stick to them or face any repercussions for not sticking to them? Not a chance.

Yeah there are repercussions, all it takes is an employee that decides to not let it go.

kennethsmyth

skallywag wrote: »

Not sure what the exact terms were, just know he was canned immediately more or less. I should see him again soon and will try to find out more from him.

While you are at it, ask him why he didn't take a case against the employer? If the employee earns enough the company never just "cans" the employee - they do a settlement so all goes away.