Employer cutting salaries without employee consent - Expected to work same hours

Lostinspace

Hi,

Posting this here on behalf of a friend, who works in a company in the west of Ireland. His employer is a global organisation, who are financially very strong, but announced in last week, via an internal mail, that they're reducing salaries across the organisation to "ensure the future of the company". They recently announced very positive Q1 results and seem to be basing the reduction in salaries on Q2 and Q3 forecasts. Salaries are being cut by between 15% - 50% depending on what grade you're at.

His employer did say that they were going to issue a letter to all employees (separate to the internal mail) explaining the situation. However, they appeared to have changed their thought process on this and as of earlier this week, they've reduced all salaries, essentially without the employee's consent or a formal agreed contract change. All employees are expected to work the same hours for a reduced salary, with little clarity on when the salary will be reviewed again.

There is no union representing the employees and the company is not seeking any support from the Governments in the countries that they have employees in.

So I'm wondering it legal for the company to amend my friend's salary, without his written consent to a change in his contract?

If not, what are the implications for him if he issues a letter from his solicitor to his employer? I presume it wouldn't be well received, but it would be interesting to hear your thoughts on this.

Thanks

Augme

It has been discussed plenty of times already. Basically it isn't legal. The whole point of a contract is that it signals that both parties have agreed to it's terms and are happy with the conditions.

As for the reprecussions. This is a much more grey area and it is obviously impossible to know for sure. What I would always say is that be prepared to lose your job when making a decision to challenge your employer. That's pretty much the best advice I can give because if you aren't willing to risk your job then don't challenge the wage cut.

skallywag

There are indeed a few threads on this topic in this forum, you should be able to find them easily enough.

Any salary reductions needs to be accepted on a voluntary basis by the employee, so consent is certainly required. The avenue to refuse is open to you, but it could then be very likely that you will immediately lose your job if your employer decides to make you redundant and can back it up with valid and authentic arguments.

KeithTS

In the current climate the company may be very easily be able to justify cutting wages so any legal battles there probably wouldn't end well.

Maybe the email was a heads up to let staff know salaries were going to change to reflect the current situation as a means to get ahead of the rumours which inevitably fly around at times like this?

Perhaps letters are currently being sent out to staff outlining the exact T&Cs of any changes with an amended contract for each employee to review and sign, with the email going out first this will be less of a shock?

Lostinspace

KeithTS wrote: »

In the current climate the company may be very easily be able to justify cutting wages so any legal battles there probably wouldn't end well.

Maybe the email was a heads up to let staff know salaries were going to change to reflect the current situation as a means to get ahead of the rumours which inevitably fly around at times like this?

Perhaps letters are currently being sent out to staff outlining the exact T&Cs of any changes with an amended contract for each employee to review and sign, with the email going out first this will be less of a shock?

Hi KeithTS, I spoke to my friend over the weekend and it seems that the company are not going to issue any letters to the employees specifying the terms of the change. It's a mandatory change in salary for the same working hours and apparently has already come into effect. Company not releasing any financial projections to justify the reduction in salaries. Employees not happy as you can imagine.

skallywag

Lostinspace wrote: »

Hi KeithTS, I spoke to my friend over the weekend and it seems that the company are not going to issue any letters to the employees specifying the terms of the change.

This sounds way out of line to me.

You would have to wonder why they are not doing so.

KeithTS

Lostinspace wrote: »

Hi KeithTS, I spoke to my friend over the weekend and it seems that the company are not going to issue any letters to the employees specifying the terms of the change. It's a mandatory change in salary for the same working hours and apparently has already come into effect. Company not releasing any financial projections to justify the reduction in salaries. Employees not happy as you can imagine.

This does sound like bad form.

If it were me I would contact HR and ask them what the story is in a civil manner.
It sounds out of line if it's just a blanket reduction in salary without any discussion or background, however, it's also possible that your friend doesn't have all the facts at this point.

Personally if the facts are all as you've stated I would be fuming, but, I would also bite my tongue and put up with it for now. Losing a job at this (or any) time is hard, finding a new one when all of this is over will be harder still. A loss in earnings may well be better than the alternative unfortunately and you wouldn't want your friend to regret taking action that could put them in a more precarious position.

nthclare

There's going to be a huge que for the the labour court after this pandemic.

Asshole CEOs brown nosing manager's and the odd lick arse going against employment legislation.

I know for sure of one company who are collectively going to oust their CEO the prick signed his own resignation by the way he shafted good workers in favour of the new good looking staff of which he handpicked and gave them a job more money and less responsibilities due to the way they look while taking print outs from the printer.

This is going to turn those greedy pricks into bartender's, hotel duty managers, trainee Tesco manager's...

Now you can see the reality of the profit's in our big multinationals, millions in profit my arse...

Smokescreen's, gaslighting and convert narcissism at the highest order.

Never believe what these vankers tell ye at board meetings, White collar criminals are alive and well in good old Ireland...

You either man up collectively and feck them out or let these fckers walk over ye for the rest of your lives...

it's your choice, work collectively to get rid of your CEOs...

Listen to get in the ring by guns in rose's just to get you pent up like...

Sick of the fckin lies...lies...lies...

I'm heading for a walk now

Cuddlesworth

KeithTS wrote: »

This does sound like bad form.

Sounds about right for a multinational though. The management is based in the US, where Labour Laws are non-existent.

Usually the process is like this, US based board of directors and CEO agree on a 20% pay cut across the company with email to go out today, so their bonus remains the same and the stock price can go back up.

They send the email and a number of location specific HR people outside of the US say we can't do that, it's illegal.

End of the month, US pay is cut for entry and mid level staff(higher up staff usually have contracts which include basic job rights), rest of the world carries on as usual.

Some point in the future, they find out but don't care because investors/stock market reacted well.