Following the recent High Court Case new proposals in relation to JLC/REA's have been made by the government:
24-Nov-10 at 18.17 | Resolve HR Admin
Following today's decision to reduce the Minimum Wage rate to €7.65. The Government has signalled that the ERO and REA rates should be reviewed. In particular the Catering,...

News

Apr 3, 2009

Cutting Wages and Salaries!!


In light of the current economic climate, where many employers are looking at implementing salary and wage cuts, what should employers consider when seeking to vary and employees terms and conditions?

Terms and conditions of employment may be a mix of those terms that are clearly set out in his/her contract of employment, those implied by custom and practice and those which are incorporated through legislation (such as the right to minimum wage) which apply automatically.

Good contracts of employment will have a clause which enables the employer to vary the terms of employment, where there is no contract or no variation clause in the contract employers can either:

1. Obtain the employee's express agreement to the change or
2. Terminate the employee's employment on due notice and offer re-engagement on new terms or
3. Attempt to impose the change unilaterally.

Unilateral variation of an employee's terms and conditions of employment to the employee's detriment may give rise to:

1. A claim of constructive dismissal under the Unfair Dismissal Acts 1977-2007 or at common law;
2. A claim for damages for breach of contract;
3. A claim in respect of an unlawful deduction under the Payment of Wages Act 1991;
4. A "trade dispute" under the Industrial Relations Acts 1946-2004,
5. Industrial relations issues, and
6. Injunctive proceedings to prevent the unilateral variation.

However in the current climate with unemployment rising to a rate of 8.3%, resistance to changing terms and conditions is low. While there has been no change in the legal requirement to obtain employee consent for such variation, many employees are accepting pay cuts where they are being implemented in an effort to ensure the business's survival.

However employers should endeavour to follow best practice when changing terms and conditions of employment and this should include:

1. Communicate with employees
2. Provide employees with reasonable notice of any intention to vary terms and conditions
3. Explain to employees why the change is necessary and what the alternative options are (i.e. Redundancies)