What to consider in choosing between salary cut vs. unpaid leave

[FeuFollet]

Posting on behalf of the proverbial friend, of course.
Can you think of flaws in the reasoning?

Company is looking to save money on wages. There are two ways to go about it.

a) impose 'voluntary' salary cut - say 10%
b) impose unpaid leave - say 1 day every 2 weeks (i.e about 10% of time and pay)

From the employee's point of view, b) seems more favourable because it is the same cut in wages with the bonus of
spare time. From the employer's point of view, this is idle time so it won't affect productivity.
From the employee's point of view I wonder if there are any implications to think about which would make solution a)
preferable .i.e. does either make a difference in terms of pension, in case of redundancy and social welfare if the case arises later, in terms of taxes, or even taking a bank loan?
Thanks for your ideas

 

[Setanta12]

Other considerata ....

- Increase in hours ? A half-hour extra each morning and evening ?

- Employer's PRSI of 10% on top of employee's gross pay applies

 

[FeuFollet]

Other considerata ....
- Increase in hours ? A half-hour extra each morning and evening ?

Increase in hours does not seem to make sense when business is low. This would be an extra half-hour doing very little every day.

- Employer's PRSI of 10% on top of employee's gross pay applies

With unpaid leave I assume the gross pay will go down by 10% and the PRSI will follow, down 10%. And that would apply in either case anyway, wouldn't it?

Thanks for the ideas.

 

[Padraigb]

Am I missing something?

A 10% cut in income is going to happen in either case; one approach involves a 10% reduction in the number of days worked, and the other doesn't. It looks to me like a no-brainer.

 

[Black Sheep]

I agree with Padraig.
Who would agree to work 10 days when they can work 9 for the same pay

 

[FeuFollet]

It looks like a no-brainer but the question is
What to consider in choosing between salary cut vs. unpaid leave
and not
Which one to choose

i.e. whether there are any other factors to take into account than time and money. e.g. option a) means redundancy would be based on reduced wages but under b) it would appear to be on the full salary which would weigh in favour of b) again.

Income tax, pension all seem to suffer equally but am I missing out on possible downsides of unpaid leave?