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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 64712
Experience:  Qualified Solicitor
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In this extraordinary time, we are being asked to take a pay

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In this extraordinary time, we are being asked to take a pay cut of 22.5% for the next 6 months. Is this legal and does everyone have to agree?
JA: Where are you? It matters because laws vary by location.
Customer: UK London
JA: What steps have you taken so far?
Customer: We are a corporate finance debt advisory business. Other than the current extraodinary circumstancces more generaly, there was not any client falling over or deal falling over that triggered the request. They are saying it is precautionary but refusing to show financials and also we know they need to sign off accounts as a going concern in order to pay dividends. We feel a bit bullied because the alternative will be redundancy (with notice period on the lower income).
JA: Anything else you want the Lawyer to know before I connect you?
Customer: No thanks

Hello, I’m Ben, a UK lawyer and will be dealing with your case today. I may also need to ask some questions to determine the legal position.

How long have you worked there for?

Ben Jones and 5 other Law Specialists are ready to help you
Customer: replied 7 days ago.
3 years in August
Customer: replied 7 days ago.
It's a small firm called Centrus Financial Advisors - been around 8 years.

Thank you. It is certainly not uncommon for employers to suddenly find themselves in a difficult position where they have to ask for unpaid leave or reduction in pay to allow them to get through this. Whilst they cannot immediately force you to agree to this, there are ways for them to try and implement it.

 

There are occasions when an employer may try and make changes to an employee’s contract of employment. If they wish to do so, there are a few ways, in which they can do it:

{C}· Receive the employee’s consent to the changes.

{C}· Give the employee the required notice to terminate their current contract and re-engage them under a new contract containing the changes.

{C}· Simply force the changes through with no notice or consultation.

 

The following options are available to employees to challenge these actions:

 

1. If the employer forces the changes through, the employee can start working on the new terms, then write to the employer making it clear that this is done ‘under protest’. This means that they do not agree with the changes but feel forced to do it as they have no other option. In the meantime, they should try and resolve the issue by raising a formal grievance with the employer. This is only a short-term solution though as the longer someone works under the terms, even under protest, the more likely it is that they will eventually be deemed to have accepted them.

 

2. If the employer gives notice to terminate the current contract and re-engages the employee under a one, it could potentially amount to unfair dismissal. However, the employer can try and justify their actions if they had a sound business reason for doing so, usually from an urgent financial perspective. If no such reason exists, it is possible to make a claim for unfair dismissal in the employment tribunal, subject to having at least 2 years’ continuous service with that employer. This would be on the grounds that there has technically been a dismissal because the original contract was terminated by the employer.

 

3. If the changes fundamentally impact the contract, for example changes to pay, duties, place of work, etc., it is also possible to resign and claim constructive dismissal. The employee must accept the changes and immediately resign in response to them. A claim is again dependent on the employee having at least 2 years' continuous service with the employer.