# Im a small Employer and I have to cut pay or let staff go. Meeting with Union.



## Niall M (6 Oct 2009)

Hi. Just some advice required. 

I am an employer and the same as everyone else: things are bad. 

I called all staff in last month to explain and said there would have to be a 20% pay cut. 

They all then went off and joined an independent union and the union have written to me saying they are refusing to take a pay cut. 

I rang the union and have arranged to meet them next week. If they don't accept the pay cuts I will have no choice but to make people redundant. 

Just in figures, I made a profit 12 months ago of 40k, this year the loss to august is 100k. 

Any advice on how to talk to union, last thing i want to do is make people redundant.


----------



## Mpsox (6 Oct 2009)

*Re: Meeting Union - What to expect*

Firstly there is nothing to stop staff joining a trade union, it is their constitutional right

Secondly at this stage you are not legally obliged to recognise the trade union or talk to them in any way. There are steps they can take to try and force you to do so, but that is something that could take months and years

Thirdly, you cannot legally impose pay-cuts on staff, you can ask them voluntarily to take a pay cut but if they refuse to do so, then you cannot simply enforce that. You are altering an employees contract and making an illegal deduction under the Payment of Wages act, you could be held to have broken their contract of employment and potentially be done for unfair dismissal if staff felt they had no option but to resign. Remember as well that the Minimum Wages rules will also apply

However, many staff around the country have taken pay cuts, some are forced/bullied into it by their employers(who are taking a risk by doing so), some do so in ignorence of their rights and some have taken it because the reasons behind it are explained to them, the consequences and risks to their employment are understood. 

You need to communicate the reasons for these proposed paycuts, perhaps add that you aim for them to be temporary to get through the current crisis and then spell out exactly what will happen if you don't get your costs down. If you need to get you staff costs down by 20%, paycuts is one way of doing it, redundancy is another


----------



## shipibo (6 Oct 2009)

*Re: Meeting Union - What to expect*

Produce documentation stating losses in business, no Union will advise members to take pay cut unless they were certain job losses were unavoidable


----------



## Niall M (6 Oct 2009)

*Re: Meeting Union - What to expect*

I want to talk to the unions, i am going to bring my last set of management accounts and show them exactly the position. Im not hiding anything from the staff, things are bad, and they surely can see it. Im a little dissapointed that they dont row in and try and save the business.


----------



## shipibo (7 Oct 2009)

*Re: Meeting Union - What to expect*

Have you tried showing books to staff and appealing to their common sense, call a meeting between you , your accountant and the staff and thrash out all issues,concerns before you meet with Union.


As I said, no money in redundancies for Union, so would,nt be worried dealing with them.

All the best in the future.


----------



## Niall M (7 Oct 2009)

*Re: Meeting Union - What to expect*

thanks crum, i have shown the staff the figures, only 2 of the staff are agreeable with the cuts. i cant understand them, well its redundancy after. will still meet union and set out my position. 

Thanks for help


----------



## Purple (7 Oct 2009)

*Re: Meeting Union - What to expect*

How many members of staff do you have?

Talk to the union but don't give them official recognition.


----------



## Latrade (7 Oct 2009)

*Re: Meeting Union - What to expect*



Niall M said:


> thanks crum, i have shown the staff the figures, only 2 of the staff are agreeable with the cuts. i cant understand them, well its redundancy after. will still meet union and set out my position.
> 
> Thanks for help


 
I'd tred carefully first. Speak to your lawyer or a representative body first just to discuss the detail. You may do or say certain things with the best of intentions, but end up suffering in the long term.


----------



## shipibo (7 Oct 2009)

*Re: Meeting Union - What to expect*

Don,t see how official recignition or lawyers/IBEC will clear this one up, OP has proof that business is failing, and unless changes are made redundancy is inevitable.

Only needs legal representation if signing new T+Cs, addendums etc ....

Think you give Unions too much credit, they are losing members due to recession and their mood (private sector) is not militant.


----------



## Complainer (7 Oct 2009)

*Re: Meeting Union - What to expect*



Niall M said:


> Im a little disappointed that they dont row in and try and save the business.


Have you told them what you want/expect them to do, and pointed out the long-term benefits for them?


----------



## Niall M (7 Oct 2009)

yes, i have shown them the loss results, and the various ways i need to cut costs. i have been totally above board with them and i would always like to think that i am very open with them and availible to consult and deal with any issues they have.


----------



## Niall M (7 Oct 2009)

*Re: Meeting Union - What to expect*



Purple said:


> How many members of staff do you have?
> 
> Talk to the union but don't give them official recognition.


 
8 staff plus myself. the staff only joined union after me discussnig the paycuts with them, the 2 that accepted the paycuts didnt bother joining the union, they said they can see and accept the proposals. what do you mean about giving them official recognition?


----------



## AlbacoreA (8 Oct 2009)

Some people just don't get it, especially in the unions.


----------



## j26 (8 Oct 2009)

AlbacoreA said:


> Some people just don't get it, especially in the unions.



I don't get that comment.  Several staff joined a union (as is their right), and are now seeking to negotiate the best possible terms for themselves in what is a difficult position for all parties - staff and owner.

What's illogical about that?


OP, treat the union with respect, and you will probably be able to negotiate a decent deal, especially if it's obvious from what you present that you are sharing part of the pain.  Contrary to the propoganda, they are generally reasonable enough.


----------



## Guest116 (8 Oct 2009)

I would strongly advise you to work with an employment\HR expert of some sort on this.

There are procedures you must follow when making people redundant or else you leave yourself open to the affected employees making employment appeals where you may end up paying out more money.

I cant recommend anyone and I dont work in HR. But I know from experience you need to do this right. Unless you know HR and employment law dont do this alone. Dont talk to the Union by yourself. If you think just by showing them your accounts that they will throw their hands up and say "ah ok, sure fire ahead and make them redundant so" you are mistaken. The union are paid to fight the employees corner.


----------



## AlbacoreA (8 Oct 2009)

j26 said:


> I don't get that comment. Several staff joined a union (as is their right), and are now seeking to negotiate the best possible terms for themselves in what is a difficult position for all parties - staff and owner.
> 
> What's illogical about that?....


 
They are not negotiating. They (Union and Saff) are refusing a paycut. 

Result they'll lose their jobs and get a paycut of 100% instead of 20%.


----------



## AlbacoreA (8 Oct 2009)

aristotle25 said:


> ....The union are paid to fight the employees corner.


 
In my experience the union fights for what ever is in their own interest. That may not be the same as the employees.


----------



## Guest116 (8 Oct 2009)

AlbacoreA said:


> In my experience the union fights for what ever is in their own interest. That may not be the same as the employees.


 
So basically they fight everyones corner except the employer


----------



## AlbacoreA (8 Oct 2009)

Your implying that the union and the employees interests are the same, my point is that, that is not always the case. From experience. Anyway this is getting off the point. Ypur advise to get an advisor is good and might save money in the long run.


----------



## j26 (8 Oct 2009)

AlbacoreA said:


> They are not negotiating. They (Union and Saff) are refusing a paycut.



Merely an opening negotiation position.

Let's say you want to buy a house where the asking price is €200,000.  If you entered negotiations saying "I'm willing to pay the asking price (and a bit more actually), but I'm hoping to get you to reduce it", you'd be an idiot.


----------



## j26 (8 Oct 2009)

AlbacoreA said:


> Your implying that the union and the employees interests are the same, my point is that, that is not always the case. From experience. Anyway this is getting off the point. Ypur advise to get an advisor is good and might save money in the long run.



Unfortunately this is true sometimes, and I've seen it happen.  But then it's up to the members of the union to make it work for them.


OP,I've just thought of an advantage of dealing with a union for you.  If there are, say, 7 staff in the union, you only need persuade 4 of them to agree, and the other 3 are bound by the union decision.


----------



## stephnyc (8 Oct 2009)

just a thought - do you think you have any employees who might actually prefer the redundancy? If they are there a number of years or have changed circumstances, maybe they want the lump sum

voluntary redundancies might be an alternative here, and might explain why the employees are flatly denying to accept the inevitable


----------



## AlbacoreA (8 Oct 2009)

Brinkmanship with peoples jobs.


----------



## Guest116 (8 Oct 2009)

AlbacoreA said:


> Brinkmanship with peoples jobs.


 
Dont want to go too off topic here. But I never understand this type of view. We live in a capitalist society, companies are started by risk takers to make money. The goal of businesses is to make profit, not to provide jobs.


----------



## AlbacoreA (8 Oct 2009)

We were talking about the union not the company. Its the union doing the brinkmanship. When they could just cut to the chase and meet halfway instead of making a song and dance about it. Anyway its not relevent to the OP's problem.


----------



## Niall M (8 Oct 2009)

stephnyc said:


> just a thought - do you think you have any employees who might actually prefer the redundancy? If they are there a number of years or have changed circumstances, maybe they want the lump sum
> 
> voluntary redundancies might be an alternative here, and might explain why the employees are flatly denying to accept the inevitable


 
I dont think so, the longest serving employee is only 5 years. so the package would not be huge for people. thanks for all the comments and help. i think i will meet the unions, pretty must say that it will have to be a pay cut or redundancy, show them my accounts and the position i am in. I dont think i will bring my solicitor as i want this to essentially be an informal meeting more than anything (if thats possible). i have my solicitor on notice to meet pending the outcome of the meeting.


----------



## AlbacoreA (8 Oct 2009)

The legal minimum is 2 weeks per year isn't it?

Though I guess it would be in everyones interest to sell the idea of reducing wages, either though wage reductions or reducing the days work. What ever is appropriate for the work comming in.


----------



## becky (8 Oct 2009)

Remember it's your company and you didn't have to agree to meet them.  If the meeting gets out of hand just call it off.


----------



## Mpsox (8 Oct 2009)

Niall M said:


> I dont think so, the longest serving employee is only 5 years. so the package would not be huge for people. thanks for all the comments and help. i think i will meet the unions, pretty must say that it will have to be a pay cut or redundancy, show them my accounts and the position i am in. I dont think i will bring my solicitor as i want this to essentially be an informal meeting more than anything (if thats possible). i have my solicitor on notice to meet pending the outcome of the meeting.


 
If you are showing your accounts to outside parties, check with your solicitors that the union doesn't need to sign a Non Decleration agreement or something like that, normally a formal recognition agreement would include this but in this case, you don't have a formel recognition agreement.

Secondly state at the start that you are meeting as a courtesy and that it doesn't imply formal recognition. You may not want to have to deal with the union on every HR related activity in the future

Personally in my dealings with union reps I've found most of them to be realistic and they have actually helped in the past in terms of pointing out the real world to their members. However there are some who may be simply out to make a name for themselves and who may be of the view that you are only out to screw the staff, regardless of what the books say. Suggest you make some enquiries as to who from whatever union is coming in to try and find out what that person is like


----------



## Niall M (8 Oct 2009)

becky said:


> Remember it's your company and you didn't have to agree to meet them. If the meeting gets out of hand just call it off.


 
Thanks Becky, im going to meet them, as a courtesy, show them the accounts, tell them its either paycuts or redundancy. thats the extent im going to say, if they going off on a tangent or anything im out of there.


----------



## j26 (8 Oct 2009)

Niall M said:


> Thanks Becky, im going to meet them, as a courtesy, show them the accounts, tell them its either paycuts or redundancy. thats the extent im going to say, if they going off on a tangent or anything im out of there.



Hardly any point meeting them then, is there, if your ideas are so fixed?

Have you considered that the workers might have some ideas other than yours to get the company back on its feet?  Maybe, just maybe, some deal can be brokered that will be of benefit to both sides, and if done in a respectful manner it could do wonders for staff engagement with the company and the problems it faces, ultimately leading to better results for all.  However, for that to happen, you have to approach it with an open mind, and to me it doesn't sound like you are doing so.


----------



## Niall M (8 Oct 2009)

I have been nothing but open with the staff for the last number of months. I have asked the staff for ideas other than what i propose, in short there are no other options. Look around, the recession is everywhere. Anyway, i met the union, showed them the accounts, they in turn left the room, met the staff. They came back and saidf the 3 options are paycuts, hours being worked reduction, and redundancy. They then said the preferred option is the redundancy!!! Isnt that the weirdest thing i ever heard! any thoughts?


----------



## missey1978 (8 Oct 2009)

I may be too late with this post but you need to be carewful meeting with the unoin as every teeney fault that you my have as an employer will be dragged up by them and they will end up tearing shreads our of you for everything and avoid the issue at hand. Dont comit yourself to anything when you meet with them and you need to have someone with you for support, hopefully your accountant will go with you. I wish you were my employeer as you seem fair and reasonable. When my hours were cut there was no discussion or pre warning about it. Another fact is that surely your staff can see how bad business really is and they have got to realise that it is a pay cut or redundancy especially after you showing them your accounts!!! You may hope that you have to make some of them redundant if that is the loyality you have. I really hope it all works out for you.


----------



## Niall M (9 Oct 2009)

Thanks Missey!!! 3 staff just text me, said they will take pay cut. said they were put under pressure from other staff to join union and refuse the cuts.


----------



## sam h (9 Oct 2009)

> They then said the preferred option is the redundancy!!! Isnt that the weirdest thing i ever heard! any thoughts?


 
I guess you should ask if anyone is interested in redundancy, I know you said you're not trading too long, but you never know, it might suit 1 or 2 and then that will let you figure out how you cut pay and/or hours.

Best of luck with it.  Heed what other were saying about the unions (going forward).  Your contract is with the employees, not the unions.  They will drag up every little issue & hassle going.  DO NOT give them official recognition....in fact, try not to meet with them directly.  They are trained to spot any minor infraction by employers and will actively encourage your employees to persue.  I'm more of the "give & take" school of thought (I'm coming at this as an employee)


----------



## Bronte (9 Oct 2009)

Niall M said:


> Thanks Missey!!! 3 staff just text me, said they will take pay cut. said they were put under pressure from other staff to join union and refuse the cuts.


 
I think you'v'e been more than fair and upfront.  Can't believe you were even willing to show them your books.  You are trying to save the company and their jobs but someone seems to have it in for you.  Someone militant who may have another job lined up or a beef with you.  Out of the 8 you have 3 who want to work with you, can you talk to each of the remaining 5 to see how they really feel.  Do they actually realise how little statutory redundancy would be?

Apart from that, with a loss of 100K do you think the business is viable even with a pay cut?


----------



## missey1978 (9 Oct 2009)

I am delighted that you got those texts...hope the rest see sence!


----------



## z107 (9 Oct 2009)

> .  Out of the 8 you have 3 who want to work with you, can you talk to each of the remaining 5 to see how they really feel.


Well I make it 5 out of 8 who want to work with them - the 2 that didn't want to join the union at the beginning, and now these three. 

You also need to axe two people. Be careful when choosing who to make redundant they they don't think it was because of their union shenanigans.


----------



## Guest116 (9 Oct 2009)

umop3p!sdn said:


> Well I make it 5 out of 8 who want to work with them - the 2 that didn't want to join the union at the beginning, and now these three.
> 
> You also need to axe two people. Be careful when choosing who to make redundant they they don't think it was because of their union shenanigans.


 
This is where you need HR\Employment expertise to advise, you dont make people redundant. You make ROLES redundant. If there is anything in the process that makes employees feel like specific people were chosen then you might end up in trouble in front of an employment appeals board.


----------



## micmclo (11 Oct 2009)

So you have eight staff and five have agreed to a pay cut.
If you decide to make staff redundant you can't just select the remaining three because they won't agree with your terms

As said, you are making a role redundant, not a specific person.
And you may well be asked to show the process you used to select who was made redundant.

Anyway, am I the only one who finds it strange that staff agree to wage cuts by text message? 
If that was me I'd expect a new contract and the opportunity to read over it and seek advice from others.
Text message seems far too informal, even if this a small company


----------

