20% pay cut, but work same hours?

[Tippytoes]

The company I work for has asked all staff to voluntarily take a 20% pay cut in these tough times. They expect us to still work the same hours as before - is this fair? Also, they say it is voluntary, but what would happen if you said no? Thanks

"....But I think saying that using salary level as a reason for redundancy would be automatically unfair isn't the case..."

Actually, it is. The law says that the role has to have "ceased or diminished" in order for an individual's employment contract to be terminated by way of redundancy. It would be a spectacular coincidence if the roles of only the highest paid had done that as a result of a downturn and a very (if not impossible) difficult criteria to justify.

You cannot (legally) terminate someone's employment contract by way of redundancy because they are being "paid more than someone else".

You might be able to use a skills argument on a shop floor where the highest skilled people's roles are redundant because demand for some product they make has gone away and indirectly they are the most expensive. But you could not select them directly because they were the highest paid.

I'd want to query what happens if the cost savings aren't enough and in 2 months redundancies do happen - is your package then based on your reduced salary?

Also and this is a bit controversial but do all your colleagues do a good job? I know where i worked previously the first round of redundancies got rid of a lot of highly paid people who didn't actually contribute a lot and ultimately that benefited the business.

Difficult decision to make though but 20% is a lot.

There is a list of automatically unfair reasons for redundancy, and salary isn't on it. Simple as that. It's not automatically unfair.

If you have 10 secretaries, and need to lose some of them, and if by losing the most expensive it means you can lose 3 instead of 4, that's not automatically unfair.

I would never advise someone to use salary as a criteria as it is more likely to be able to be challenged, but in some circumstances it could be fair.

I'm not saying in the OP's individual case it would be fair, and certainly there are some dodgy things going on there.

Flowery, when is it fair or shall I say, legally justifiable, to cut the highest paid employees in a pool?

It could potentially be justifiable in my example in my last post. If there are 10 people all doing the same job, and by cutting the highest paid 3 it means they can cut 3 jobs rather than 4, for example, I think there could be an argument that that would be justifiable. If by doing so they save one more job, that's a fairly strong argument.

I'm not saying it would be fair. But using cost as a reason wouldn't automatically be unfair either.

Thanks, flowery. I suppose. Though as you say, if the individual got higher pay through experience and year-on-year increments, then there is potential for an age discrimination claim.

Yes absolutely. It's not a good criteria to use at all, really, for all sorts of sensible reasons. Using skills, performance and all the other usual recommended crteria is far more sensible both in terms of keeping the best people, and also in terms of it being more obviously fair, meaning people are less likely to be willing or able to challenge the decision.

But should an employer choose to use salary level it's something that would have to be looked at in terms of the circumstances, not something that would automatically be unfair.

Yes, sorry I see what you mean. If you are talking about the definition of "automatically unfair" as relates to the redundancy process then salary doesn't qualify for automatic status. I accept that.

What I was trying to say was that I think you would have a really, really hard time at a tribunal if you had simply selected people based on their salary and not looked for more appropriate criteria.

This would be especially true in this case where those who had refused a pay cut were selected (because they would have been the highest paid for a few weeks before the inevitable redundancies occurred).....I just cannot conceive that an employer would (or should) get away with that.