Instead of layoffs (which can take a long time to recover from), my company instituted a temporary 10% pay cut for all employees. Any change to your contract of employment must be agreed by both you and your employer. Can you make a profit and get your money to do some good? If you do not object in writing, it is possible that you will be held to have agreed to the proposed variation simply by continuing to turn up for work. How to start investing and grow your wealth. Employees with two years' service are entitled to receive a redundancy payment regardless of the financial circumstances of their employers. You cannot apply for it yourself. Are banks triggering a mortgage credit crunch? JM: In ordinary circumstances, it is very difficult for an employer to reduce your salary without your agreement. If you agree to a variation of your employment terms, your employer will usually send you confirmation in writing. However, if you don't want to agree to the changes then your employer cannot force you to agree or to sign anything. The Budget, the base rate cut and the stock market crash. We are doing our best to help as many people as we can who are facing employment issues resulting from the coronavirus. Are electric bikes and scooters the future of getting about? However, your income has been reduced by 20 per cent for at least three months, starting with your salary due in May. If you can produce written evidence to show that you did not agree to the variation, this will give you some protection if there is a dispute in the future about what has been agreed. It is possible to refuse to be furloughed, however, doing so may put you at risk of redundancy and/or termination of your employment. However, your employer is allowed to give additional protection to employees who are pregnant or have underlying health conditions, and is allowed to treat some sections of the workforce differently from others for non-discriminatory reasons. A boss can't require you to work at a rate of pay you didn't agree to, but you also can’t force him or her to pay you a rate they don't agree to pay. Your employer should proceed with caution, however, as there are no guarantees that the courts will consider this reasonable conduct. Pay cuts are legal as long as they are not done discriminatorily (i.e., based on the employee’s race, gender, religion, and/or age). If your employer does decide to reduce your salary and hours without your consent or the right reserved in your employment contract, you have the following options: You need to be employed for 2 years to qualify in making a claim for unfair dismissal. LC: Often the employment contract requires any changes to contractual terms to be recorded in writing. Please feel free to send a contact form or call 020 7100 5256, Please click here to access our main Coronavirus FAQ page, Click here to access our FAQ page on Furlough leave (the coronavirus job retention scheme), Click here to access our page on Coronavirus and the rights to pay whilst absent from work, Click here for our directory on coronavirus and going back to work, Click here for our directory on your main employment law rights. Crunch time for Brexit, but should you protect or try to profit? Does the watchdog have a plan to finally help savers? Hopefully, their approach will be sympathetic. For a pay cut to be imposed on any employee, their consent must first be given in order for the reduction to be legal. Furlough leave only requires employees not to work for the business (or a linked or associated company) which is claiming the relief. An estimated 50 to 70 people were laid off. The overall impact to the bottom line was the same, we were still able to meet all commitments during that time period, it was easy to … Yes, you could and your employer may agree to this. Has the pain in Spain killed off summer holidays this year? Are investors right to buy British for better times after lockdown? PLEASE CLICK HERE TO ACCESS OUR FAQ PAGE ON YOUR GENERAL EMPLOYMENT RIGHTS RELATING TO CORONAVIRUS, Click here for the coronavirus and going back to work page. What would you spend a lottery win on? Will helicopter money be the antidote to the coronavirus crisis? Is there still time for investors to go bargain hunting? All Members of Parliament and political office holders will be taking a one-month salary cut. Normally, any variations to the contract (including any reduction in salary) must be agreed with you in advance. This decision is therefore one the employees in questions will have to consent to. In practice, there are a variety of reasons why an employer might want to make salary cuts. accept the reduction, because some work and income is better than nothing in these very uncertain times. How much do you need to save into a pension? Some employees may be urged/forced to take a part-time schedule. Landau Law is a trading name of Landau Law Limited (Company No: 08876494) and regulated by the Solicitors Regulation Authority (Registered No: 611950)Designed by WHOLEGRAIN DigitalPlease be aware that this site uses cookies for Google Analytics and social media.© Landau Law Limited. How many state pensions were underpaid? The rise of the lockdown investor - and tips to get started. High mile club: Bentley's £150,000 V8 Flying Spur is the brand's most affordable and frugal limo - but should you spend an extra £21,000 for the meatier W12 version? You are, as you have pointed out, lucky in that you still have a job and therefore a regular income. However, it might be able to force you to agree to a pay cut by threatening to dismiss you if you do not agree, so long as it can show that it is reasonable to take such a draconian step. If an employer has reduced a full-time employee's hours, it should usually offer to reduce the hours of a part-time employee in an equivalent role by the same proportion. There is more likely to be a redundant situation where your hours are being reduced, and whether or not there was a flexibility clause in your contract of employment allowing for a variation will be relevant here. The only exception is where your contract of employment reserves the right to vary your pay and hours, however even then any such variation would need to be reasonable and for solid business reasons. Some businesses have been forced to ask their employees to take temporary pay cuts and/or reduced hours in order to get through financial difficulties created by the coronavirus. We do not allow any commercial relationship to affect our editorial independence. Does loyalty pay? How do you make comedy pay the bills? In England and Wales, workers are legally protected from dismissal, including constructive dismissal, and you could be entitled to make a claim to an Employment Tribunal for compensation. James Medhurst of Royds Withy King said if you do not want to agree to a variation of your employment terms, it is important that you set out your objection in writing. There is an alternative scheme in place for those working for themselves. Grant Thornton has asked its UK staff to take a voluntary sabbatical or a dramatic pay cut, the latest move by a business to try to reduce the financial impact of the coronavirus pandemic. They are not obliged to give their consent, and they could take legal action to prevent such a change. This field is for validation purposes and should be left unchanged. Employees who work part-time should be treated in the same way as those who work full-time, unless the employer has a good reason for treating them differently. Has lockdown left you with more to save or struggling? You would again then be able to bring a claim for unfair dismissal, even if you have accepted the new contract. Are you ready for an electric car? Challenger, CEO of outplacement consulting firm Challenger, Gray & Christmas, "Real pay cuts for people are something companies are very cautious about doing. Will a stamp duty cut and Rishi's rescue plan be enough? Pensioners pressured into paying twice for a TV licence forced to wait months for a refund, How to keep homeschool costs down: It's not just the price of laptops and tablets that leave families struggling, Is it time to add bitcoin to your portfolio now that City investors are? Are negative interest rates off the table and what next for gold? It could be you! For example, an employee felt forced to leave a job because the employer made their pay a lot less Making changes to employment contracts can be a complex legal matter. What Boris as Prime Minister means for your money, Here’s how to help people impacted by Covid-19, Hampshire council was early investor in Moonpig, BlackRock:Covid must inspire climate action, Rolls-Royce to burn through another £2bn of cash, Wetherspoons boss cashes in £50m of shares, Put your question to our team of independent experts. Reduce your salary without your agreement with your salary without your agreement you don ’ t accept pay! A formal grievance with your employer may back down, although it is very difficult for an employer to your. Reduce their overheads if they 're struggling to stay afloat by 20 per cent for at least three months starting! Play an important role on an employee, you have no right to buy and bit. Reducing your pay in an attempt to reduce your salary without your agreement you your. 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