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.

antimatterx

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.

LuasSimon

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.

DaraDali

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.

Augme

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.

James 007

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.

_Brian

There is no legal way they can unilaterally enforce a pay reduction.

However as many have pointed out above your cards will be marked.

It’s unclear yet the extent of the forthcoming recession, I don’t think it will be mild anyway, so if taking this cut kept you in employment I think it’s worth considering.

It may of course affect future redundancy if things don’t improve.

Augme

salonfire wrote: »

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

Because it would be a lot cheaper and easier to close the other ones. The hassle of trying to close the unionised one would be fairly significant. The company would be looking at having to potentially go through lengthy negotiations, strikes and then significant payouts to close the two factories. For the non unionised one they just need to pay statutory redundancies.

_Brian

sgthighway wrote: »

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.

Local company here owned by a local family. The father and son owners have taken out about €50 million in last five years (publicised in papers), staff are on a 30% wage cut for 4 months now, it’s quite disgusting. They were given the option of pay cut or immediate redundancy.

Victor

Augme wrote: »

Because it would be a lot cheaper and easier to close the other ones. The hassle of trying to close the unionised one would be fairly significant. The company would be looking at having to potentially go through lengthy negotiations, strikes and then significant payouts to close the two factories. For the non unionised one they just need to pay statutory redundancies.

The problem there for you is that around the world, many pharmaceuticals are made at single or at most a few sites. Converting a site from making drug A to drug B could cost tens if not hundreds of millions of euros.

B.A._Baracus

Annoying "choice" you're given.
- don't take the cut and be potentially get the axe when they announce more cost cutting measures.
- times are gonna be bad soon. So having a job with 20% reduction is better than not having a job.

If it was any other time the advice would be just start sending your CV out.

tdf7187

davo2001 wrote: »

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?

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).

Seve OB

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).

you need to brush up on your legal knowledge

I woke up over morning to find my employer has reduced my basic pay by 20%, my allowances by 25% and restructured my hours so I had to do 30 hours free a year. I am in a union

Maybe it's better not to be 🀔

_Brian

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).

You don’t need a union to have statutory rights.
An employer can not legally enforce a pay cut without employee agreement.

ZeroThreat

_Brian wrote: »

Local company here owned by a local family. The father and son owners have taken out about €50 million in last five years (publicised in papers), staff are on a 30% wage cut for 4 months now, it’s quite disgusting. They were given the option of pay cut or immediate redundancy.

If you have a problem with this, better not to work for any family business. From my own personal experience they're only set up to look after themselves at the end of the day and it rarely ends well for anyone know in the family circle.

Mrs OBumble

ZeroThreat wrote: »

If you have a problem with this, better not to work for any family business. From my own personal experience they're only set up to look after themselves at the end of the day and it rarely ends well for anyone know in the family circle.

Family businesses exist to generate wealth for family members. Nothing wrong with that: the family has put its welbeing on the line to take the risk of starting/running the business.

Shareholder-owned businesses exist to generate wealth for shareholders. Nothing wrong with that, either: the shareholders have invested their resources to take the risk of starting/running the business.

If you have a problem with working for the man in either of those scenarios, then you need to go and work for the government.

Strumms

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 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.

Hoboo

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).

You can set up a union or be part of one, but the company doesn't have to recognise it. Fruitless exercise especially in multinational pharma.

Hoboo

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 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.

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

Seve OB

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 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.

I’d say they’ll be lining the streets to offer you a job.

Strumms

Hoboo wrote: »

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

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.

Strumms

Seve OB wrote: »

I’d say they’ll be lining the streets to offer you a job.

Well, I don’t know about lining the streets but my record shows that for every job I interviewed for an offer followed. Call that lining the streets or lining my inbox.

Problem is there is still all be it an ever dwindling number of people in the workforce who just from experience and their upbringing expect when an employer asks them to jump, the answer is how high.

Hoboo

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 monkey who I trust.

If you think a HR monkey (clearly ignorant to what an shrm practitioner is) as you put it wouldn't have you out the door first pick and not be able to demonstrate fair process and procedure was adhered to, and provided, regardless of the fact, you're in dreamland. It's done all the time, identifying talent and disruptors is a key business and HR strategy. Disposal of bad eggs to put it bluntly is often easier than retaining talent. Being able to demonstrate equity is never an issue.

With your attitude the only interview I'd imagine you'll be having this year is an exit one.

Strumms

Hoboo wrote: »

If you think a HR monkey (clearly ignorant to what an shrm practitioner is) as you put it wouldn't have you out the door first pick and not be able to demonstrate fair process and procedure was adhered to, and provided, regardless of the fact, you're in dreamland. It's done all the time, identifying talent and disruptors is a key business and HR strategy. Disposal of bad eggs to put it bluntly is often easier than retaining talent. Being able to demonstrate equity is never an issue.

With your attitude the only interview I'd imagine you'll be having this year is an exit one.

Practitioner ? Maybe practical joker might be more in your line. Your post above is very indicative of certain HR attitudes especially those at amateur hour companies like obviously the one you take so much glee in representing but what might look like standing up in an office arena wouldn’t in a courtroom so I’d advise caution, while not every employee has time or the ability to document and so on, i most certainly do and have done, since I witnessed a certain unpleasant occurrence befall an old colleague of shaft dot com proportions by your lot and management.

antimatterx

Hoboo wrote: »

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

This is why HR is such a BS job. You think you're important and love to meddle with everything when nothing really concerns you!