I have had my salary cut by 10% this week (with immediate effect) due to the coronavirus and uncertainty

31st Mar 2020

My employer has cut all the employees salaries by 10% and 20% as they are unsure about the future of the company due to them doing business within Leisure/Restaurant/Residential.  We were called into a meeting this last week and told us all we would have a salary cut with immediate effect. I was called separately into a meeting room for 2 minutes to have my old monthly wage and what will be my new monthly take home pay written on a post-it note. There has been no official letter or renewal of contract.

In the meantime Directors (4 of) are cutting their own salaries by 40%, albeit still earning a high salary of course.  Approx 15 consultants are all keeping their Company cars and having mileage/expenses paid. They are also still intending to take on a new employee in May.

I am in the lowest pay bracket of the company and living alone in rental accomodation (private rent is very high) and suffering with a 10% reduction.

Is this a legal what they are doing?

CATEGORY: Employment

LOCATION: SUFFOLK

1 answer
  • Summerfield Browne Limited

    An employer is entitled to make a change often known as a ‘variation’ to an employment contract if:

     

    An employer can force a new contract on employees, although this should be a last resort and could lead to legal action.

    The contract would need to be checked to see if such a clause exists and whether it is clear and specific about what can be changed. If the contract is absent of such a clause then the employer and employee would need to agree to the change before it can go ahead.

    Changes can be agreed verbally or in writing, but they do not always have to be in writing. However, when a change is made to an employee’s pay then this must always be in writing and the employer must do this within a month of the change taking effect.

    If the contract does not allow for any variations to be made and you do not agree to the reduction, then your employer might be breaking the contract's terms and conditions and therefore may be in ‘breach of contract’.

    Should you require further information then please do contact Summerfield Browne Solicitors on 0800 567 7595.

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    Summerfield Browne Limited

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