Third of employers planning to cut wages for employees – your rights explained

A THIRD of employers who haven't already cut workers' salaries are preparing to, according to new research.

Almost a fifth of firms have already asked staff to sacrifice some of their pay to keep them afloat during the coronavirus crisis, reports The Times.

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Up to 30% of employers who hadn't already cut wages are still considering it if it helped the business to survive, the study found.

Meanwhile, 52% said they wouldn't reduced pay in any circumstances.

The exclusive survey spoke to managers from small and large businesses across the country and was carried out by the Chartered Management Institute (CMI).

For most firms, workers' salaries is the biggest cost and is the most obvious target when it comes to reducing overheads.

What are my redundancy rights?

BEFORE making you unemployed, your employer should still carry out a fair redundancy process.

You are entitled to be consulted on the redundancy lay-off first and to receive a statutory redundancy payment, as long as you've been working somewhere for at least two years.

How much you're entitled to depends on your age and length of service, although this is capped at 20 years. You'll get:

  • Half a week’s pay for each full year you were under 22,
  • One week’s pay for each full year you were 22 or older, but under 41,
  • One and half week’s pay for each full year you were 41 or older.

Sadly, you won't be entitled to a payout if you've been working for your employer for fewer than two years.

There should be a period of collective consultation as well as time for individual ones if your employer wants to make 20 or more employees redundant within 90 days or each other.

You are also entitled to appeal the decision by claiming unfair dismissal within three months of being let go.

Average pay fell by 1.8% between April and July this year when adjusted for inflation, according to the Office for National Statistics (ONS), during the first few months of lockdown.

It's illegal to force salary cuts

Bosses can't force you to take a pay cut though –  it's illegal in the UK to impose a reduction without permission.

Employers have to ask for your consent before permanently docking wages and you're completely within your rights to refuse them.

But it's worth baring in mind that if your employer can't afford to keep you on at your current pay, then it may look to end your contract completely.

As the government's furlough scheme is now closed to new applicants, workers' could be left without any income if they lost their job.

Worker's who have had pay cuts forced on them without their consent have two options.

Can your employer reduce your hours?

AN employer may look to reduce overheads by cutting back your hours and pay as a result.

Employers can only tell you to reduce your hours if it's already outlined in your contract saying that they can.

If not, then they can't force shorter hours and cut your pay as a result without consulting you first.

You can refuse your employers proposals but they may also look to end your contract completely if the can't afford to keep you on.

There must be a fair consultation period before they do this.

They can either resign and then make a claim against the company for unfair dismissal.

Or they can remain working in the job "under protest" and claim compensation from your employer to cover their loss of earnings.

"Unless there is a clause in your contract which allows your employer to [cut your pay] you can refuse," Adam Pavey, employment solicitor at Poole Alcock Solicitors told The Sun.

"If they tried to enforce this you could in theory take your employer to a tribunal for breach of contract or for what is called an unlawful deduction of wages.

"However, in the present situation you may be waiting a long time to have your case heard and so this is unlikely to be a good option."

A second lockdown is the biggest fear

The survey also showed that businesses are most worried about a second lockdown (63%) and its economic impact.

It comes as Prime Minister Boris Johnson is set to outline tighter restrictions for England in the Commons today.

This morning, Michael Gove confirmed the government will advise Brits to work from home if possible after weeks of telling people to go back to offices.

Meanwhile, 27% said that a no-deal Brexit on December 31 was an even bigger worry.

Most firms polled said that extending furlough would reduce pressure on employers but the PM has previously said "it can't go on".

The scheme sees up to 70% of workers' wages paid for by the government, with employers topping it up by 10% and making staff pension and national insurance contributions.

From October 1, the government subsidy will drop to 60% of wages until finally being withdrawn completely at the end of the month.

Cutting off the support is expected to spark mass redundancies as millions of workers are still relying on the scheme for income.

Ann Francke, chief executive of the CMI, said: "So far most businesses have been able to avoid pay cuts by careful planning around government support, like the furlough scheme.

"If the government goes ahead with withdrawing the scheme, those businesses, especially in hard hit sectors, may find their position becomes unsustainable."


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