Temporary pay cut made permanent ???

LegacyUser

Hi

First up, apologises if this has been covered recently. I've scan the last 25-30 threads, so I hope it hasn't.

I work for a small company (<15 staff) in Dublin.
Company has been in existence for a little over 20 years and I've been with them for nearly 10.

Like everyone else we experienced the recession in 2008/9 and in 2010 the company made the difficult to make a few redundancies while the remaining staff (about 10 of us outside of the company directors) agreed to take a pay cut ... on average about 10%

So the pay cut was first signed in Sept 2010, and we were asked to resign again in Sept 11, Sept 12 and Sept 13.

To be honest it was no real surprise when we were asked to resign in each of the last 3 years (4 in total) but thankfully business has picked up in the last 12 months or so and we (me and my colleagues) were not expecting to be asked to resign the pay cut agreement in Sept of this year.


And here's the odd thing ... We haven't been asked to sign again but are wages are still been deducted from our pay packet!!

So what's our position? What should we do next ...

I have already approached my boss/operations director and while he made some positive remarks about business improving and he acknowledged that we had "taken the pain" for 4 years at the same time he didn't commit to anything and left the conversation open ended.

We don't know if we are getting our 10% back, if it will be back paid or if we will have to re sign the pay cut deal ?!?

Aside from all that .. what our my options if I am asked to sign up to the pay cut again... am I obliged to? What if I refuse? Does a temp pay cut become a permanent pay cut by default after X amount of time.

Of the 10 of us that took the pay cut only 7 of us still remain. .. The others moved on to other jobs by choice over the last 3 or 4 years so the other 6 current staff are not affected..

In the last 9 months we have also taken on 2 new members of staff ... in two new roles that didn't exist before the very 1st pay cut. One of the roles is quite senior and the person is a former consultant whom im sure is on a considerable salary.

They (the directors) have also spent quite a bit of money on the other areas of the business ... like 3rd parties to come in and upgrade some of our premises. None of it particularly urgent or business driven. Stuff that could have been avoided while they were "tightening our belts" as a business so to speak.

For example, last November ... 8 weeks after we had already resigned the pay cut they also circulated an email saying there would be no xmas bonus again that year and 1 week later they spent 6K doing up 2 bathroom on the premises.

Anyway. That's about the height of it... opinions and suggestions welcomed.

Stheno

Tbh, given that it's in place four years from what you've posted, I'd be surprised if it wasn't considered a de facto arrangement that is accepted by staff.

Bandana boy

I have no idea on the legal status of on-going pay cut ,but from a negotiations point of view I would not be bringing up store refurbishment and on-going maintenance work as unnecessary tasks ,when negotiating with the boss.
I also would not be pointing to what somebody else may or not be paid . Both weaken your argument and actually may all have merit as a reason he cannot “afford” to pay you 10% extra.

Stick to the facts
We agreed this cut when business was X
Business has returned to Y we would like for the pay cut to be reversed as was outlined 4 years ago.

skallywag

Joan Burton's Pet brick wrote: »

For example, last November ... 8 weeks after we had already resigned the pay cut they also circulated an email saying there would be no xmas bonus again that year and 1 week later they spent 6K doing up 2 bathroom on the premises.

OP, would customers of the business also typically use these bathrooms, or were they for staff use?

therecklessone

Joan Burton's Pet brick wrote: »

And here's the odd thing ... We haven't been asked to sign again but are wages are still been deducted from our pay packet!!

So what's our position? What should we do next ...

I would suggest that depends on the document you signed, and the contents within.

If the document specified a time period for the pay cut and that time period has now lapsed then I would argue that you are no longer bound by the temporary alteration to your contract of employment, and should be entitled to full restoration of your pay.

If however the temporary nature of the reduction was not explicitly stated and the date for review was not mentioned then there may be an argument to say that you have agreed to an adjustment that can be continued by your employer at their discretion.

Judging by your account I suspect the former is the case.

This extract from the Citizens Information website would have been useful when you agreed to the original change:

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

If your employer asks you to work fewer hours or take a pay cut, this is a change to your contract of employment. Any change to your contract of employment must be agreed by both you and your employer. When deciding whether or not to agree to working reduced hours or to a reduction in pay, there are a number of issues to be considered:

Reduced pay – what are the implications of this – for example, money and tax and paying the rent or mortgage

Scheduling of working hours – it may suit you and your family to reduce your hours, for example working a day less per week or 2 hours less each day.

Downturn in business – what choice do you have. If you don’t accept a reduction in your working hours or pay, your employer may decide to make you redundant.

You should ask your employer to give you written details of this proposed change to your contract of employment including a review date. You should respond to this in writing and if you are proposing to accept the change, you should stress that your acceptance is temporary. At the review date the change to your contract can be reconsidered and you could ask to return to the original terms and conditions of your contract.

Best of luck.

LegacyUser

Hi Guys. OP here

Apologies for the delay getting back. I appreciate the feedback. (The Android APP doesnt allow you to post anonymously and this is the first time I've had a chance to sit down in front of a desktop PC).

@ Bandana boy. I appreciate where you are coming from and I will take your advice. I dont want to get into a mud slinging match with my boss when trying to iron things out.

I'll say nothing about the money been spent on the refurbishments or the cost of hiring new staff in roles that never existed even when we were busy.

The guess I (or we - me and my co-workers) just thought that perhaps they were obliged to reinstate our temporary pay cut before they stared rehiring new employees and new roles but I guess that's not the case.

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@ Skallyway

... the bathrooms are 100% purely for staff use and not customer facing.

Other example, (and I know I can't/wont be bringing this up) is after year#1 when we were asked the resign the agreement for a further 12 months... the company's accountant turned up and met the directors on a Thursday evening to review the annual figures etc.

On the Friday morning we were all asked to re-sign the agreement (which we did) and on the Monday morning all 3 of the directors turned up to the office at 9am in new cars!!! New merc's and BMW's ... you couldnt make it up.

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@ therecklessone

Great advice there. Thank you very much.

I've just re-read the latest agreement I signed in Sept 2013. I can confirm that it DOES explicitly say that the pay cut is temporary in nature. it Is for 12 months. It expires in Sept 2014 and it will be reviewed again in 12 months from the effective dates (24/9/13)

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I've asked for a 'performance review" with my boss (and the company directors) later this week/early next week.

I haven't had any form of annual review/appraisal since we cuts were introduced in 2010 whereas in the 4-5 years before that we had them every 6 months.

Any suggestions on how I should approach the pay situation with them would be greatly appreciated.

LegacyUser

Hi Guys. OP here again.

I did reply with a comprehensive response to you all a few days ago but for whatever reason it hasn't been posted.

@Bandana boy

Thanks for the reply, I see where you are coming from and will heed your advice. I dont want to get into a mud slinging situation with my employer, as on the whole they have been very good to me over the last 10 years so I will stick to the facts.

@skallywag.

They are just for staff. On the rare occasion we would have clients in the building they have access to alternative facilities which are more than adequate and were not in need of refurbishments.


@Therecklessone

I had a quick re-read of the agreement over the weekend and it very explicitly says the pay cut is temporary in nature, is for 12 months obly, expires in Sept 2104 and will be reviewed at the end of the 12 month period (Sept 13 to Sept 14) .. and the review has not taken place to date.

P.S. COYS

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Anyway, I've requested a 'performance review' which should take next week. We used to have them every 6 months prior to the pay cut but they stopped doing them after the 1st pay cut in Sept 2010.

If anyone has any advice on how I should raise the subject and argue my case, I'd appreciate it.

therecklessone

Joan Burtons Pet Brick wrote: »

@Therecklessone

I had a quick re-read of the agreement over the weekend and it very explicitly says the pay cut is temporary in nature, is for 12 months obly, expires in Sept 2104 and will be reviewed at the end of the 12 month period (Sept 13 to Sept 14) .. and the review has not taken place to date.

P.S. COYS

************

Anyway, I've requested a 'performance review' which should take next week. We used to have them every 6 months prior to the pay cut but they stopped doing them after the 1st pay cut in Sept 2010.

If anyone has any advice on how I should raise the subject and argue my case, I'd appreciate it.

Hi OP.

I'm fortunate that I've never faced the circumstances you do right now, any changes imposed on me have been negotiated by my union and have been clear and unambiguous. Ive spent some time as a trade union official (local rep) so my advice would usually focus on the legality of your employer's actions.

In this case it does appear that they are in breach of a temporary contract amendment and are required to at least review the situation as of September. Of course, a review does not equal a reinstatement, and they could request a further year from you and your colleagues. How you would respond to that would I'm sure depend on your other options: have you considered looking elsewhere for work? Would you be able to attract a better salary if you did? If moving is not an option then you may have no alternative but to accept a further temporary cut.

Now, seeing as you are in line for a review this gives you another way of approaching this. Use this opportunity to emphasise your value to the company, and make sure you bring up your flexibility in helping the company weather the worst of the downturn. Don't explicitly say that the temporary pay cut has expired and you want your salary adjusted at the outset, but if offered a pay increase make sure to clarify that it is on the reinstated salary rather than the adjusted one. If offered nothing then advise them your temporary agreement has expired, and ask them for a response.

Best of luck.