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Salary Reduction

carol wraight

Hi,

This is my first post and my first time with this issue so I am hoping you will be able to assist.

Issue: We have an employee who has worked with us for several years and over the last few years has received extremely high pay rises.  The business is now not doing as well as in previous years and we need to reduce the salary.  Reasons are loss of business and the comparison of the role to others along with the current workload decline.  We have approached the employee with the issue and to no surprise they are not happy.

Has anyone had experience with this and what was the approach you took and the outcome?

Parents

  • Welcome to the communities.

    Simply speaking you can't unless you get their agreement. They don't have to agree and you may need to find a compromise around timing, buy-out etc. (its one of reasons its often better to reward excellent performance with a non consolidated bonus). If you really cant reach agreement after extensive consultation and debate then you might considering firing and rehiring but it fraught with difficulty and is likely to destroy engagement.

    The alternative is to make this role redundant. But I think you may struggle to fit this into a redundancy situation.

  • in reply to Keith
    Hi Keith,
    Thank you for the response was exactly what I thought. With regards to redundancy would that not be workable with the loss of business resulting in less employees needed in that department?
  • in reply to carol wraight
    If you genuinely have less work and need less employees then yes it is a redundancy situation. It is questionable if you could/would select this employee (who is surely one of your best employees) but thats down to your criteria.
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