Are you legally entitled to reduce an employee’s salary retrospectively? The position in question was advertised with a salary scale, interviews held and a written offer made to the person setting out what the salary scale was. This was accepted in writing and the person has been working in that post, at the advertised salary, for 18 months. However, due to the current economic downturn the salary is no longer sustainable and has been reduced by 8%.Posted in : First Tuesday Q&A NI on 2 February 2010
It is not clear in this question what is meant by “retrospectively” – if the current economic downturn has brought about a planned 8% reduction in the employee’s salary, any proposed changes will have future effect only. Any such change will amount to a variation of the employee’s terms and conditions of employment. Unless the contract of employment allows you to vary the terms then you must obtain the employee's consent to do this.
The most effective way of obtaining consent is by express agreement from the employee and best obtained in writing to defend against any potential breach of contract and/or unlawful deduction of wages claims.
If you do not obtain the employee’s written consent,
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Back to Q&A's This article is correct at 02/09/2015
The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.