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Home / New Zealand

<I>Ask the expert:</I> Less pay after trial period

30 Nov, 2004 01:18 AM3 mins to read

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By MARIE WILSON

Q. A friend's employer offered her a new full-time contract as her existing fixed term trial basis contract had completed its three-month duration. The pay on the trial contract was hourly and the full-time contract was to be an annual salary. However, the equivalent pay for the full-time
contract was significantly lower than that for the trial period and the employer actually automatically lowered her pay without her agreement to the new contract.

Prior to receiving the contract, she was told by her supervisors that her pay would not decrease after her trial basis. After receiving the contract her employer told her that she was getting paid too much. The nature of her work will not change at all from the trial period to the fixed term. Her employer told her she was ignoring the fact that she now had annual and sick leave. Can she resign and claim she has been constructively dismissed? Would this lead to some sort of pay out as with a "hurt and humiliation" claim?

A. She should talk to the Employment Relations Service about this. From reading the relevant websites for the ERS, it wouldn't appear that she could resign at this point and claim constructive dismissal with confidence of a favourable resolution.

I'm not her lawyer, but she should consult one if she is considering just walking off the job and hoping that it will all be worked out in a constructive dismissal claim. She does have several other options, however, as her employer does not appear to be acting reasonably.

Her employer is mistaken if he is saying she wasn't entitled to holiday pay (and accrual of sick leave entitlement) during her trial period. She was an employee then and was covered by all the laws that apply to employees, including holiday and sick pay - so these are not new elements of pay in her new permanent contract.

She may want to make sure that her employer is crediting her prior service for sick leave, and has accrued her holiday pay entitlement. She is entitled to ask for a copy of her payroll records to make sure that these are noted.

The argument that her salary should be less than her wages during a trial period does not seem to be sensible.

She should be worth more to the employer with her experience on the job and with the certainty that she will work out; how could she suddenly be worth less?

Often salaries are higher than wages for the same job because the employee has less access to overtime, and pay administration costs are less for the employer, so the argument that the employer is making does not appear on the facts you have provided to be fair.

More to the point, her employer cannot unilaterally change her terms and conditions of employment. She should let her employer know that the proposed contract is not acceptable and that a reduction in her pay is not acceptable either.

Changes (and new terms) must be negotiated by the parties and accepted by both sides. Her employment contract must include provisions for the resolution of disputes; she should refer to these provisions and follow them through, but she may need the mediation services of the Employment Relations Service (or the facilities of the Employment Relations Authority) if the internal processes are not successful.

The Employment Relations Services operates a helpful website and a toll-free number (0800 800 863). There are time limits on letting your employer know about the disagreement, so she should get moving on this.

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