What are my rights if I refuse to take a pay cut during the COVID-19 pandemic?

31st Mar 2020

My company sent an email out to all employees yesterday regarding the situation during the COVID-19 pandemic asking for us to accept a 20% cut to basic salary for employees who are not going to put on furloug. We've since had another email a few hours after stating more details which ask us to accept the temporary reduction to basic pay, giving us until later today to respond to accept the reduction. It also says that if we do not respond by the cutoff time they will assume that we agree to the temporary terms. There is no end date to this period, other than saying .it'll be reviewed monthly. Is the cutoff period to accept the changes or not, legal? If i refuse the pay cut, can they terminate my employement with or without severence pay?

CATEGORY: Employment


1 answer
  • Summerfield Browne Limited

    It is not unusual for businesses to try and reduce their overheads by reducing the amount they pay to their staff during times of financial difficulty. However, in the UK, it is unlawful for an employer to enforce a reduction in pay across the board.

    For a reduction in salary to be imposed on any employee, their consent must first be given for the reduction to be legal. This means that the reduction in salary can only be applied across personnel if each staff member agrees to it.

    If the employer tries to impose a reduction in pay without having first obtained consent then the employee may be able to take action by either leaving the job, initiate a claim against the employer for constructive unfair dismissal or continue to work but "under protest" while initiating a claim for compensation to cover their loss of earnings that have resulted from the enforced reduction in salary.

    As an employee, you are entitled to refuse the reduction in pay. However, if you do refuse then the employer may decide to terminate your contract of employment by issuing the contractual period of notice. They may offer to re-hire you following the termination based on the new terms of the reduction in pay. However, if you put up with the change without protesting, then this will likely be viewed as having acquiesced the change, thereby losing your right to object to it.

    Employers have a legal duty to staff and if reduced pay requests are to be made to numerous employees, then the employer has a legal responsibility to consult with the employee representatives or trade union regarding the proposal.

    If the employer does not follow the process accordingly and within the law, then there may be a breach in the law and legal action may be taken against them.

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

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