Employer reducing pay consquences??

I work in construction so company is not having a great time at the moment – I say not great, but its not terrible either.

This week I’ve had my pay cut by 10% as have the rest of the 6No. staff here (was about 25 staff not long ago). I wasn’t particularly happy but I do understand why it was done and dont have any real problem. I have now just been told that we may start finishing at lunchtime on a friday so that would be 4 hours down and therefore another 10% of my wage gone. This I have got a problem with.

If I was to be made redundant now – would my redundancyu money be based on my original wage or my wage less 10% as it is now. Bear in ind that I’ve worked here for over 10 years so I think its unfair if I was to receive a reduced redundancy because of a pay cut in the last few weeks.

Anyone know the rules?

It really is stuff like that needs to be talked through before you agree to any change in conditions, also is the cut acroos the board from director to the lowest paid. I’m sure there are a lot of companies out there that are struggling but I am equally convinced that there are some unsrupulos companies that are using the ‘fear factor’ to cut costs and reduce the quality of working conditions.

I’m sure it is across the board – as for talking and agreeing – there was none of that – it was more of a, be told and accept it

union?

private civil engineering contractor – no union

Are you an employee under a contract of employment (i.e. not an independent contractor)? If so, you really need to look at your contract to see what it says about reducing hours and remuneration. In most jobs, it can’t be done unilaterally/without mutual agreement and would probably amount to an act of constructive dismissal.

you have to watch that if/when they do redundancy your payout is on what pay level. Also, if you have a final salary pension on what salary is it based?

A bit late in the day, but it needed to be clearly written down, how big was the cut, hours and/or salary, how long for, and consequences for other benefits.

Probably not an issue but if you wanted a Mortgage on what would they base the calcs.

Hi mike, yes I am under a contract and directly employed – I’ll have a good read tonight, although from memory it may refer to reduced working hours but certainly not reduced pay. As per my original post, I didn’t mind (too much) the first 10% cut but now another 10% is a bit harder to absorb and my main concern would be my redundancy entitlement if it came to that.

It may constitute a major change in your terms and conditions (I think either the reduction in hours or wages would be enough)and therefore be a constructive dismisal case if you wanted to refuse to accept them leave and then fight it – without free representation via a union not worth it IMHO
You can join a union it is illegal for your employer to refuse to let you join but you cannot be forced to join one either
You need a written letter from them stating these changes and saying for how long they are in place is it temporary or permanent?…if not they are simply breaching your contract as they are not paying you or employing you asper the terms of it… they cannot do this verbally and unilaterally (unless your contract says this explicitly which I doubt) and it is NOT a reasonable request from a line mamager or something similar
In terms of redundancy you need to know what your contract says and what the law states
One week pay for evey year worked and 1 1/2 for each weeek after 42 years old iirc. Capped at 20 weeks
Law states maximum of £385 per week
If you have the legal minimum and pay is still over £385 your redundancy will be unaffeted.
If you fight the reduction they will probably sack someone to achieve the same saving… only you know whether they are doing it for the right or the wrong reasons
Taking into account tax etc you will probably be aboout 12-15% down on takehome
Good luck

Yosh, Union or no union I would take some professional advice on this.

Isn’t it strange that we have been so panicked by the media that people are saying things like

I didn’t mind (too much) the first 10% cut

Please don’t get me wrong I am more than aware of the current situation and appreciate that people are worried about their jobs but when companies start all this take it or leave it malarky we know we’re heading for problems.

I know unions are by no means perfect and some are pretty toothless but there is some security to be had, at least as far as bargaining goes.

As someone who experienced first hand the cock-ups in the 70’s and in the 80’s you and everyone else suffering through this have my sympathy best of luck.

Big article in the Guardian/Observer the weekend before last on this issue.

thanks for all your help guys – I do need to read my contract – in the mean time I’ve asked the HR woman (yes, seriously a HR person for 6 staff and 60 site lads) to confirm what I’ve been asked to do in writing. 😐

Your employer is very brave doing this.

A unilateral (i.e. take it or leave it) change in your employment terms can be done by an employer where (a) it has the right in the employment contract and (b) the employee gives consideration for this (consideraiton being the legal requirement to make a contract or contract variation binding).

Where the employer does not do this, and partuicularly in the case of a reduction in salary (not sure if wages are treated the same here – you’ll be able to clarify: if you’re paid monthly, you’re salaraied, if you’re paid weekly/on a by the hour basis, you’re waged), then this may amount to a repudiatory breach of contract by your employer allowing you, as others have said, to walk out and claim constructive dismissal.

If you all do that, then they’re f***ed – it’s unlikely they’ll be able to cope with 20 odd claims. So, you need to force them to explain how they consider they are entitled to make such siginificant changes to the terms of your employment and to provide commitments relating to things like period this will be instituted, pensions, redundancy pay, etc.

I can’t add much of use to the advice already provided, other than to say that if enough of you join a union you can force your employer to recognise the union in question – and it will then have to negotiate with elected representatives on matters such as this.

This is the single biggest benefit of union membership IME, the feeling of strength that comes from collective representation.

If you’re interested, contact a suitable union and ask for advice on setting up a chapel.

To answer the original question – redundancy is calculated on your salary at time of notice.

The company where i work dropped this on us last week , 10% cut in wages upto june and then reviewed in june …… company gave us 30 days notice of change to contract ,unions have got involved now and it turns out they need to give us 90 days notice of contractual change as stated in the company handbook !! not 30 …..
they said today that if we refused to take the paycut , they would have to call the adminstrators in by the middle of feb …..
Hope you get it sorted
Tony