My employer wants to cut my wages

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In the current economic climate, many employers are considering a variety of creative cost-cutting measures, including pay cuts. But Local Authorities or your employer should also consider the legal ramifications as, in some circumstances; they may leave themselves open to legal action.

  • What steps should your employer take when it wants to impose pay cuts?

In general, a pay cut cannot be imposed without an employee's consent. First, an agreement should be obtained in light of your employer's financial position and, possibly, as a way of avoiding redundancies or other more severe steps.

For example;

(a) Going Part-time or Term-time indefinitely or for an agreed period of time
(b) Not replacing a technician colleague who has recently retired

  • Ok, if you AGREE to the proposed change, how should this be handled?

You should be issued with confirmation of ANY change in writing, and be informed that it is a permanent change, unless it has been agreed for a limited period.

  • I DON'T AGREE with these proposed cuts. What are my rights here?

No employee has to accept the proposed change, unless you are bound by a Trade unions'collective agreement.

If your employer tries to make the pay cut without your explicit agreement or by formally terminating and replacing your contract, then you may either make it clear that they are working under protest, or resign on the grounds that your employer has breached your contract of employment by imposing a unilateral change.

In either case, you should immediately raise a grievance detailing your complaint. You will then be in a position to bring a claim for unlawful deduction from wages and/or, if you have resigned, constructive dismissal.

Keep in mind that during the current economic crisis, one tactic used by employers is to terminate your contract of employment 
and force you to re-apply for your old job - perhaps on different terms and conditions less favourable than before. This type 
of action is PERFECTLY legal. However, given what has been mentioned above, if you failed to be re-appointed to your "old job"  
then you would be able to collect redundancy payment.
  • If some of my colleagues accept a pay cut while others don't, what are the options?

If an agreement has not readily been forthcoming and your employer still wishes to proceed, they should consider carrying out formal consultation and, if all else fails, they can dismiss those staff who continue to object. Your employer must first consider how many staff will be affected.

Since there are always less than 20 science support staff in any school, your employer can consult this group individually. Normally a 30-day period should be allowed. Your employer may consider a slightly longer period than this at their discretion or by agreement.

When any change can be implemented will depend upon what is agreed. Where terms and conditions have been collectively agreed with one or more trade union, negotiations should be conducted accordingly.

Your employer will need to establish a sound business case for the proposed change, and employee representatives (or district Trade Union representative) may expect to see financial documentation to support this. If after consultation no agreement is reached, employees that are affected should be informed in writing that a continued refusal may result in their employment being terminated. Any such dismissal must be undertaken in accordance with statutory provisions in force at the time of the proposed dismissal. The employees should be offered re-engagement on the new pay terms.

  • If my employer terminates my/our contract of employment, will I/we be entitled to redundancy pay if I/we still refuse the pay cut?

No. The employer will not be dismissing you on the grounds of a redundancy situation: (i.e., a diminishing requirement for a particular kind of work, workplace closure or business closure), but on the basis of the refusal to accept a pay cut.

  • If your employers' measures do not result in the required cost savings and staff are made redundant, would their redundancy pay be based on our reduced rate of pay or the original salary?

Statutory redundancy pay is calculated on the basis of a week's pay subject to a current maximum of £350 (from February 2009). A week's pay is assessed at the calculation date, which is usually the date of dismissal. If there has been a contractual variation, even if this takes place shortly before the calculation date, the redundancy payment will still be calculated on the varied rate of pay. If your pay was reduced on a temporary basis, they will be able to argue for a payment based on their original salary.

See also:

--Ssmith 06:05, 27 January 2009 (UTC)

--Mark Beech 12:06, 14 March 2011 (UTC)

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