# Taking a Pay Cut At Work



## jackmackey (20 Jan 2009)

Hi....I was hoping that somebody could help me. The company I work for has asked the staff to take a pay cut of 20% for the remainder of 2009. They are saying that the downturn has forced them into doing this and that if paycuts are not agreed upon there will be redundancies across the board. Yes the industry we work in has been devastated and many competitors have axed staff. But what I want to know is

(A)Is this legal and can companies do this?
(b) As mMost of the staff are on a legally binding contracts doesn't the company have to honour these contracts?
(c) What is the position of an employee who has been on the payroll with contract for, say, six years and the salary stipulated six years ago is significantly lower than the salary they are on now.....as wage increases etc kicked in over the last few years?
(d) are there other options open to our employer that have not been explained to us??>

Any advice would be appreciated.
j


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## nigel27 (21 Jan 2009)

To be honest if my previous employer told me I had to take a 20% pay cut I would have been pi**ed. However since he didn't ask me and instead made me reduntant, I would now gladly take a 30% pay cut just to still have a job. Jobs are very scarce and any vacancy that comes up is tough to get as numbers of applicants are up and salaries being offered are much lower......
My advice, be glad to be employed at the moment!!


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## WIFESLIST (21 Jan 2009)

The only thing that worries me about the last comment is that if your employer cant make it out of this down turn and the worst happens ie that you are made redundant what salary is your redundancy calculated on ie your salary now or one thats 20% less. if he's going under well.........


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## mathepac (21 Jan 2009)

jackmackey said:


> ...
> (A)Is this legal and can companies do this? ...


Legally, they are perfectly entitled to ask for paycuts.


jackmackey said:


> ...
> (b) As mMost of the staff are on a legally binding contracts doesn't the company have to honour these contracts? ...


Yes, unlesss they cease trading because they can't make economies.


jackmackey said:


> ... (c) What is the position of an employee who has been on the payroll with contract for, say, six years and the salary stipulated six years ago is significantly lower than the salary they are on now.....as wage increases etc kicked in over the last few years? ...


Is the company proposing cuts in current salaries or reverting to the old contract rates and cutting those?


jackmackey said:


> ... (d) are there other options open to our employer that have not been explained to us?...


Probably; see my response to (b) above.


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## Airtight (21 Jan 2009)

legally they are entitled to ask for a pay cut: Then why are the public bodies saying that is it illegal for the government to ask them/enforce a pay cut, (social partnership is at an end)


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## MugsGame (21 Jan 2009)

They can propose a pay cut instead of say redundancies. They cannot make a deduction from your wages without your (or a collective bargaining) agreement.


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## minion (24 Jan 2009)

THe mechanics of an employer forcing a pay cut on staff are complex.

It would be very hard to explain here.

As far as i know, you and the rest of the staff have to agree to it.  If the majority dont agree and there are redundancies you get redundancy payments.  If you dont and the rest of the staff do you may not be entitled to redundancy payments.

Does anyone have a link to any info on this which  may explain it better than i can.  I may even be totally wrong here.

Im also not sure if your uf this :
If your contract states the amount of notice that you must given i think that the employer does not have to stick to this if you are made redundant.


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## exbroker (25 Jan 2009)

Taking a pay cut kept me in a job, if only for an extra 4 months. It is seen as a great act of loyalty by both your existing and future employer. My advice would be take it and then start looking around for a more secure job, try and have as few gaps in your CV as possible. Also find out what effect 20% would have on your net pay after tax and PRSI. It may not be as bad as you think.


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## Bronte (26 Jan 2009)

You say your industry has been devastated.  Therefore your employer has to cut costs.  If everyone takes the 20% reduction he may be able to trade out of the current difficulties.  Otherwise you may be facing redundancy in a market with no other jobs.  Nigel's post is where we are at.


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## Clarice (19 Aug 2010)

WIFESLIST said:


> The only thing that worries me about the last comment is that if your employer cant make it out of this down turn and the worst happens ie that you are made redundant what salary is your redundancy calculated on ie your salary now or one thats 20% less. if he's going under well.........



Hi, can anyone answer this for me?  Thank you.


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## PaddyW (19 Aug 2010)

It would stay at your current rate, before 20% is counted in, for a period of 12 months, as far as I know.


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## Clarice (19 Aug 2010)

Thanks Paddy


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