KEY POINTS:
Q: Our employer has recently announced that it wants to reduce our salaries from a certain date. We have been asked to agree to this cut by signing a document. I don't intend to sign this. Can they reduce my salary anyway? Do I have any
rights? What can I do if my employer goes ahead with the reduction?
A: Your salary is a term of your employment agreement. Your employer cannot alter the terms of employment without your consent.
In respect of your colleagues, your employer is entitled to reduce their salaries if they agree to it.
Your employer can reduce their salaries if they are on an individual employment agreement (as long as they are receiving at least the minimum wage).
Sometimes employees agree to wage reductions to prevent redundancies.
For employees who are on collective employment agreements (CEAs), an employer can only pay less than the amount they are entitled to under the CEA if their employment entitlements are varied using the procedure stated in the CEA. If you find that your employer reduces your pay without your consent, you do have a number of options available to you. The most common would be an action for arrears of wages, together with a penalty action and a compliance order. This means you would ask the Employment Relations Authority to order the employer to pay the amount of salary the employer has failed to pay you since introducing the salary reduction and a penalty (fine) for breaching your employment agreement, plus an order that the employer reinstate your correct salary and continue to pay it to you.
Any penalty is usually paid to the Crown, not the employee. Interest could be awarded on the amount of salary you have lost.
If your employer does reduce your salary without your consent and you want to bring an action against it, you should first consider whether you want to stay with your employer. Claiming your arrears of wages will sour the relationship.
You may be able to resign and claim constructive dismissal, as well as your arrears claim.
If it comes to this, you should definitely take advice. For information about the options available to you, contact an employment law specialist or the Employment Relations Service.
If you did bring an action, your employer might say that the reduction was necessary to prevent redundancies so that the business would survive.
This does not remove an employee's right to be paid their full salary. You should be aware that if it gets to this stage and you do bring an action against your employer the outcome may result in reinstatement of full salaries for all staff within your organisation.
This may lead to the employer losing business and could result in some redundancies.
All is not lost, you do have options and remedies available to you. If the salary cut does happen, you will have to bear in mind that any action by you for reinstatement of your full salary could cause redundancies.