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Can I be singled out for a pay cut?(3 Posts)
I will have to be vague about my job I'm afraid as I mustn't out myself.
The company I work for needs to cut costs and have done a profitability study. They are making a loss on employing me, and I have been told that my pay will be cut by 50% or I will be made redundant.
I fully accept that my pay will have to reduced if I am to continue working there, but others who are also unprofitable are not being treated this way. The company's reason for this is that they have the capacity to become more profitable as they do different types of work to me, and for that reason it is legal for them to single me out. I don't agree that I am redundant as my job still exists - they want to employ someone cheaper.
Can they do this?
If your job still exists then they can't make the role redundant.
In some circs, companies can unilaterally change T&Cs to contracts but they have to go through a lot of hoops (consult, try to get agreement, etc) before taking this step (and they do indeed have to offer redundancy as an alternative). But they have to prove genuine business need if they are cutting people's hours and pay. EG if company was struggling to pay debts then a 20% paycut across the board to everyone would be considered OK by a tribunal if that were the only way to avoid redundancy/insolvency. It would not be considered OK to single out just one or two people (unless those one or two had such huge salaries that they themselves were creating the insolvency issue - eg star footballer wages). I am fairly certain that they don't have a leg to stand on in terms of simply getting rid of one or two 'expensive' people and replacing them with someone cheaper - especially if they are just run of the mill employees. Even if I am wrong you have absolutely nothing to lose in pushing this back very firmly.
A tribunal would possibly have had sympathy for the company if it were restructuring pay and reducing everyone by 20% and then introducing a profit bonus scheme for people who subsequently became profitable - they may have kept (just) inside the law if they had done that. As it is, I think they are chancing it with you.
VERY important question - have you been with company more than 12 months? Everything above assumes you have. Also, has any of this action been ratified by a union after lots of discussion? Both have a material impact on what your next steps are.
Assuming employment>1 year, no union, and that you are a run-of-the-mill employee, you should send them an email stating:
Having taken advice, it is my understanding that:-
1) I am not in a genuine redundancy situation, because my role still exists
2) Even if the number of headcount needed to be reduced (which it does not) there have been no reasonable steps taken by you to determine a fair selection pool and as such I am being unfairly selected for redundancy
3) Because I do not agree to a pay cut, any attempt by you to reduce my pay or withhold in any way monies owed to me is a fundamental breach of contract.
I will have no hesitation in taking immediate action should you proceed along a path that is not permitted under UK Employment Law legislation, and I will be seeking to understand in more detail the reasoning behind your decision to single just me out for this treatment, which I believe to be a serious level of discrimination against me. Please confirm at the earliest opportunity that you will be withdrawing from your plans with regard to either terminating my employment or unilaterally reducing my salary.
You can either do that as part of a formal grievance, or as a precursor before then raising a formal grievance if they fail to backtrack.
Thanks very much for that advice squiffy. I have been there for a long time and feel betrayed by this - what you have told me makes me feel better. Are you an employment lawyer? If not, perhaps you should be.
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