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Original poster

Any experience of either paycut or no payrise?

12 replies

QS · 30/05/2009 00:12

In the current climate, how can you go about reducing staff pay legally? Expenses must be cut, as sales are at an all time low. We dont want to let anyone go as we want to keep all positions and employees, ie avoid redundancies. Can we NOT give payrises this year? Or can we reduce positions to 75% rather than full time and let staff work a 4 day week rather than 5? Etc?

OP posts:

KatyMac · 30/05/2009 00:16

It's quite tricky QS

When I did it it was with the agreement of the staff - they all cut their hours by a percentage

But they knew that I had taken no profit for several months

I don't think you can reduce unilaterally - I think you need unanimous support - apart from no payrises as they aren't contractual (or are they for you?)

Tinker · 30/05/2009 00:20

I've experience of both. Plenty of people get no pay rise, don't think it's obligatory to get one. Well, know it's not. And I've experience of a unilateral reduction in working week by a day. Not the best way to deal with things since part-timers hit harder but no reason why cuts in hours can't be discussed with staff against redundancies.

JeMeSouviens · 30/05/2009 00:22

Our company did the no payrise or promotion unless they considered you underpaid in comparison to colleagues or were exceptional. With 60% made redundant in December, those left didn't seem to be bothered about it.

KatyMac · 30/05/2009 00:25

Tinker - that is why we went with percentage cut in hours - to make it fairer (if that were possible)

MumHadEnough · 30/05/2009 01:44

Our company also did no payrises this year, with the exception of a couple who did get a small rise to bring them up to scratch with a couple of colleagues.

Everyone took it reasonably well considering most of our staff have been with the company for its full 9 year history and have been accustomed to year on year rises (even if just inflationery).

I think that most people are happy just to keep their jobs in the current climate.

My husband's employer (motor trade) has just cut their overtime rate to single rate. It wasn't very well received but over the past few weeks they've witness quite a few competitors reduce to a 4 day working week. So that has made them all realise that they're actually doing ok to still have a full wage and bare rate overtime.

So I'd say no pay rise is fine, even in a company where staff are a bit spoiled with rises every year. The MD did write a nice letter to all staff explaining that he was protecting the financial interests of the company, thanking everyone for their continued contribution and that all hard work is taken notice of. He also promises in the letter to increase salaries once the company was in a better position to do so.

LeninGrad · 30/05/2009 08:26

This reply has been deleted

Message withdrawn at poster's request.

PuppyMonkey · 30/05/2009 08:28

I got my annual pay rise in November, phew, but then in January my company introduced no pay rises thing too.

Blackduck · 30/05/2009 08:36

Just finished a contract with a v. large reinsurance compnay (who,it has to be said made v. big profits in the first four months of this year), but have still implimented a pay freeze across the board.....

Original poster

QS · 30/05/2009 09:49

Thank you. I agree the prime concern should be to avoid redundancies and people losing their jobs. Staff has been quite "spoilt" and have seen payrises of between 10-30% each year depending on seniority. But we are talking about loyal employees who has been with us 7-8 years.

OP posts:

llareggub · 30/05/2009 10:12

It is possible to do but you still need to do it properly. You need to start consulting with staff and staff representatives as soon as possible. I'd also advise seeking advice from an experienced HR professional or lawyer to ensure that you don't end up in a mess.

MumHadEnough · 01/06/2009 12:54

QS are you my boss? lol

fluffles · 01/06/2009 12:59

i think it's best to do a vote - my DPs work did this and chose a 10% paycut while my friend's work agreed to being on notice for a four day week (ie. at any point if they didn't have enough work the managers could tell people on the friday that the following week was a 4day week) in truth they haven't had to do it yet but the staff are actually looking forward to their long weekend when it comes which is great for morale.

put together a few proposals:
e.g. unpaid holiday, shorter hours, paycut

which all save the same amount of cash and let hte staff discuss then chose in a secret ballot.

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