Unfair Paycut ?

benthebeetle

I would appreciate opinions and suggestions to my situation. It would be very helpful.

I work for a small company in the Northeast. My employer summoned me to a meeting saying that management were to be given paycuts. Mine amounts to 20% basic plus my annual bonus which amounts to 20% of my package is also not being paid. I reminded my employer that i needed to consent to all of this and that they could not change my terms and conditions of employement without consent.

The company is breaking even, after a lot of restructuring, ban on recruitment etc. I take the job very seriously and have given it all over the last 18 months resulting in a 50 hour plus week / 6 day week, very little hols etc. Now to come in and bully a 20% paycut plus the 20% bonus cut in mind is really taking it to far. What are my options ? What is the norm in paycut land? I am prepared to work / cover do whatever it takes, but to loose 40% salary is not fair, its opportunistic! What options has the employer got if i don't accept their proposals? The role is a necessary one.

Thanks for your suggestions.

sharper

Well firstly your bonus is a bonus, you're not going to get too far arguing against its loss when your company is breaking even.

You get more information on the legal situation here http://www.citizensinformation.ie/categories/employment/employment-rights-and-conditions/contracts-of-employment/being-asked-to-reduce-your-hours-of-work

Basically unless the company is lying about its financial situation and is secretly profitable you won't get too far. They can and probably will force a paycut on you. You always have the option to leave and seek employment at a wage level you find more appropriate elsewhere.

A 20% cut for a manager is on the high side for cuts but not crazily so. Cuts of around 10-15% are quite common in non-property sectors and in property sectors much much more severe than that.

If I were you I'd probably take the cut without too much fuss and see how things go. If your company starts making a profit that's the time to start getting forceful about your salary/bonus because realistically they won't have much incentive to increase everyone's pay at that time.

Sleepy

Have you tried pleading your case? Might be worth stating what level of cut you're prepared to accept but you think that they're demanding a bit too much of you considering the extra lengths you've been going to etc.?

benthebeetle

Many thanks for your feedback. Obviously a lot of factors to consider now.

jhegarty

Work 40 hours , 5 days week, take all your holidays.

That's your 20% back without any problems.

mood

jhegarty wrote: »

Work 40 hours , 5 days week, take all your holidays.

That's your 20% back without any problems.

Agree. Work exact hours in the contract, take all your holidays etc. I'm not saying don't work hard just don't do unpaid overtime etc. This will free up your time and maybe you could take on some part time work. If your employer complains about it tell them that you can't work for free on that salary and need to take on another job in order to pay your bills etc.

jhayden

benthebeetle wrote: »

I would appreciate opinions and suggestions to my situation. It would be very helpful.

I work for a small company in the Northeast. My employer summoned me to a meeting saying that management were to be given paycuts. Mine amounts to 20% basic plus my annual bonus which amounts to 20% of my package is also not being paid. I reminded my employer that i needed to consent to all of this and that they could not change my terms and conditions of employement without consent.

The company is breaking even, after a lot of restructuring, ban on recruitment etc. I take the job very seriously and have given it all over the last 18 months resulting in a 50 hour plus week / 6 day week, very little hols etc. Now to come in and bully a 20% paycut plus the 20% bonus cut in mind is really taking it to far. What are my options ? What is the norm in paycut land? I am prepared to work / cover do whatever it takes, but to loose 40% salary is not fair, its opportunistic! What options has the employer got if i don't accept their proposals? The role is a necessary one.

Thanks for your suggestions.

I think its a 33.3% paycut overall and not 40%. (Not much of a help but not as bad as it could be).

eg if your base salary was 20000
Bonus (20000 * 20%) = 4000
Total Salary 24000

After deductions
New base Salary(20000*80%)=16000
Bonus = 0
Total Salary 16000

Percentage salary cut = 100 * ((24000 - 16000)/24000) = 33.3%

As other people said work the hours as per the contract and take the vacation as per your contract entitlement.

Wishbone Ash

mood wrote: »

tell them that you can't work for free on that salary and need to take on another job

You'd want to be careful about that. Some employers' contracts forbid employees working for another employer simultaneously.

jimmycrackcorm

jhegarty wrote: »

Work 40 hours , 5 days week, take all your holidays.

That's your 20% back without any problems.

+1 for this. You have no choice on taking the paycut but the time you get from cutting back the work is worth quite a lot in a non-financial sense.

Union Advisor

Hi I have only signed up to this site but there are few points that i would suggest.
1) you should examing your contract of employment to see the details of bonus payments
2) you should consult the payment of wages act to see if you have any recourse
3) it appears your employer is breaking the organisation of working time act by making you work an avearge of more than 48 hours per week
4) you are entitled to raise a grievance with your employer in relation to any aspect of your employment
5) you are entitled to be accompanied to this meeting by a trade union representative
6) it is your legal and constitutional right to join a union
7) join a union

Wishbone Ash

benthebeetle wrote: »

I take the job very seriously and have given it all over the last 18 months resulting in a 50 hour plus week / 6 day week

Union Advisor wrote: »

3) it appears your employer is breaking the organisation of working time act by making you work an avearge of more than 48 hours per week

It would appear that the OP is opting to do those hours rather than the employer rostering him/her to do it. Many salaried employees choose to work long hours in the hope of bettering themselves and furthering their career. I can't see that he/she would have any case here in relation to hours worked.

benthebeetle

Thanks for your advice on the issue which has been invaluable.
Yes I could have done with the strength of a union behind me, this would have not happened if there was a union negotiating on my behalf. But that's life in small private business for you!
Employer has outlined the position in writing now. Have till next week to decide. It's up to me. They cant change t&c of employment without consent.

Wishbone Ash

benthebeetle wrote: »

Yes I could have done with the strength of a union behind me, this would have not happened if there was a union negotiating on my behalf

Just bear in mind that, although you have a constitutional right to join a trade union, you employer is under no obligation to recognise a trade union and is perfectly entitled to refuse to negotiate with a trade union or any representative for you.

Union Advisor

you are correct wishbone ash when you are refering to collective issues, however each company is obliged to have disciplinary and grievance procedures (d&g's)which must be in line with the labour relations commission code of practise. which states that individuals may avail of union reprsentation at (d&g's).
which is why everyone should avail of their legal constitutional right to join a union.

in relation to the working time act employers are obliged to ensure that their employees are not breaking the act and they are obliged to keep records of the time employees work. again if you were a union member i am sure your union would advise you to submit a formal greivance objecting to the unilateral changes to your contract of employment.The matter could end up at the rights commissioner but if you were aunion member it is unlikely that you will incure any charges other than your union subs, which are tax deductable.

Sangre

You do not have to legally take any paycut (below whats in your contract). They need your written consent. Usethis as leverage and sit down and have a reasonable discussion.

Idbatterim

if you are paying the higher rate of tax, the cut will be under 10%. If they are breaking even, 20% sounds a bit extreme!

sharper

Sangre wrote: »

You do not have to legally take any paycut (below whats in your contract). They need your written consent. Usethis as leverage and sit down and have a reasonable discussion.

And his employer doesn't have to employ him either.

If his employer is in financial difficulty then the notion of leverage is useless. Other measures mentioned here such as working only the hours absolutely required might further degrade the financial position of the company.

Pay cuts aren't nice but if they're necessary then they're necessary and no amount of negotiation will avoid them unless the financial situation improves. If the paycuts aren't necessary then that's a totally different situation.

Sangre

sharper wrote: »

And his employer doesn't have to employ him either.

If his employer is in financial difficulty then the notion of leverage is useless. Other measures mentioned here such as working only the hours absolutely required might further degrade the financial position of the company.

Pay cuts aren't nice but if they're necessary then they're necessary and no amount of negotiation will avoid them unless the financial situation improves. If the paycuts aren't necessary then that's a totally different situation.

What grounds would he be dismissed on?

If he is made redundant he could argue unfair selection.

sharper

Sangre wrote: »

What grounds would he be dismissed on?

If he is made redundant he could argue unfair selection.

Read the citizen's information link in the second post in this thread. I don't know what grounds you think someone would have for "unfair selection" or how you suppose any court in the land could remedy a situation where an employer is losing money and has to cut costs.

Nonoperational

jhegarty wrote: »

Work 40 hours , 5 days week, take all your holidays.

That's your 20% back without any problems.

What a ****ty attitude.