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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 47375
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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5 months ago the company I worked for underwent a cash crisis.

Resolved Question:

5 months ago the company I worked for underwent a cash crisis. At that time I took a 10% paycut which I agreed to with the proviso that that sum, forfeited each month, would be reimbursed in full once the company's cashflow was more stable. I have just resigned and know the company has a large payment coming in this month which would set it back on course financially.
Am I entitled to this sum owed to me on my departure, whether or not this payment comes in? There's nothing in writing to confirm I accepted this 10% cut and my existing contract states my salary was a full 80,000 GBP and not the reduced salary of 70k.
Submitted: 2 years ago.
Category: Employment Law
Expert:  Ben Jones replied 2 years ago.
Ben Jones :

Hello, my name is ***** ***** it is my pleasure to assist you with your question today. How much are you owed in total?

Customer:

About 4500.

Ben Jones :

There would be some sort of formal agreement in place, even if nothing was documented in writing. The issue is trying to argue that the conditions on which you agreed to accept the pay cut have now been satisfied and that the requirements for repaying you the amount have been met. You say that it was simply agreed that the money would be repaid when the cash flow was more stable. That can be somewhat of a subjective statement and not something which can be shown to be achieved easily. What one person may see as a stable cashflow may not necessarily be what another sees so a disparity may exist between people’s interpretation of this statement. Therefore, when you believe the company is in a position to repay you may not necessarily match their perspective on the situation. So it is this lack of anything specific in writing that deals with clear conditions on when the money is to be repaid that will make its recovery potentially difficult.

However, that does not prevent you from trying to pursue them for this and attempting to come to some sort of compromise. Initially it would be direct discussions with them, you may then consider threatening to take this further via the legal route, hoping that prompts them to act, finally you could actually consider making a claim – this you can do either in the employment tribunal or the county court.

Hope this clarifies your position? If you could please let me know that would be great, thank you

Customer:

Hi Ben,

Customer:

Hi Ben,

Customer:

Thanks for this. My questions are A.As there is only one formal,signed legal document-my contract-does this not take precedent over a verbal agreement. B. If the decision hangs on either parties' interpretation of what a stable cash flow is, would I in fact have any real grounds, and therefore a realistic chance of winning the case, if I went to an employment tribunal or the county court?

Ben Jones :

Hi, to answer your questions:

a) Just because something is in writing it does not mean it takes precedence. If there was another formal agreement in place, whether verbal or in writing, and it amended the terms of the contract then that can also take precedence. A contract is forced through an offer, acceptance and consideration – if these were resent then a legal contract would be in place, regardless of whether it was in writing or not. This is the likely scenario here because the employer offered a pay reduction, you accepted it and then it was implemented. So this would take precedence over the written contract for the time being, until the conditions on which it was based were satisfied.

b) That is the million-dollar question as they say. In such circumstances, where the condition to be satisfied is rather unclear and subjective there will always be a risk. Your position would have been stronger if you had agreed on specific parameters to be met but what was agreed was quite open to interpretation. That does not mean you won’t be successful but there will be risks. Instead of actually going ahead and making a claim you could use threats of doing so to try and negotiate some sort of agreement with the employer.

Hope this clarifies your position?

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