Can I enforce a pay cut?

My small print business is struggling financially. To try to keep all staff on board, we have put forward a proposal to cut their salaries by 10 per cent. Of our 12 employees, two are against the proposals. Can we force the pay cut through, or will we need approval from everyone?

Rodney Hylton-Potts, leading employment litigation lawyer said;

It is unlawful to reduce salaries without the express consent of your employees, even if the majority of agreed, but there is a solution.

You should provide the employees who face a pay cut with full details of the business, behind the proposals and seriously consider their objections.

Where staff have willingly accepted the new terms and conditions, you should record the agreement in writing and make sure that the changes are reflected in their employment contracts.

Forcing through the changes will only encourage those who are adversely affected to pursue tribunal claims for unlawful deductions from wages and constructive dismissal. If they succeed, your business could face having to pay substantial compensation.

Defending tribunal claims can be stressful and time-consuming. Instead of cutting pay, have you considered other, less risky ways of alleviating financial pressure on your business – such as implementing more flexible working patterns? An agreement with employees over changes to staff benefits is likely to have a more positive effect on morale, which you may find leads to increased profitability.

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