Pay Cut 25%

Hi,

Hope someone can help with this scenario.

In a construction company, the employees have been asked to take a 25% cut in wages. This is on top of the bonuses, which have also been axed, which makes the actual cut a lot bigger.

The employees concerned are willing to agree to this cut, but want some assurances that the employer will not come back to them in 6 months time looking for another pay cut. The company is profitable although rather "top-heavy" with a high number of directors.

The employer is not willing to give any assurances regarding this cut.

AFAIK, they have not received a written statement of terms of employment. They have said they received a one-page document with a few points on it, but it doesn't seem to have covered everything that should be in the written statement.

Where do the employees stand? Their jobs still exist, so there would not be a redundancy situation. Should they hold out for assurances before agreeing to this cut?

Any advice appreciated.
Nutso

If the company is profitable now why do they want to cut wages or why would a cut be agreed tn the basis that there is no real need for the wage cut I would be worried that the company will be back for more cuts later.The culture where wage cuts are accepted even in a profitable company should be resisted ,if wage cuts are necessary for survival thats fine but pay cuts for no good reason is not on

One hundred thousand people have lost their jobs in the construction sector in the last 6 months. I would be surprised if the company would offer assurances or promises for the future in regard to pay and conditions. A 25% cut is a major swipe on wages but one has to be realistic in todays world, something has got to give - such a cut in wages enables to company to keep people employed.

I understand that. But with the bonuses being axed, it's actually a 37.5% cut - bonuses were paid every other year. I don't know anyone who has taken a 37.5% cut in wages.

My DH alone was responsible for over €1m of variations on the project last year, so he is more than paying for himself, the cost of his wages would be a tiny fraction of that. The job he is on is guaranteed to be running for the next 1.5 years minimum.

The reason they would be prepared to agree to the cut is that they understand that there is plenty of competition out there for jobs. But at the same time, the company cannot unilaterally sack everyone on the job and bring in replacements, surely employment law still has to be followed?

If company are seriously expecting you do take a cut, they need to open the books to prove the business is in difficulties, also negotiate the cut and when things improve, have a contract signed by both sides detailing how the contracts can be brought back to present status.


Not enough transparecy from company on this issue presently

I work for a construction company. We have also been asked to accept a pay cut. I can see the reason for the paycut as I am involved in estimating work. We are unable to obtain new work as our costs/overheads are too high. In order to obtain new work it is necessary to reduce our costs.
While the company above is profitable if there are no pay cuts there is likely to be no work in 6-12 months time as jobs finish up and no new work replaces it.

crumdub12 said:

If company are seriously expecting you do take a cut, they need to open the books to prove the business is in difficulties, also negotiate the cut and when things improve, have a contract signed by both sides detailing how the contracts can be brought back to present status.


Not enough transparecy from company on this issue presently

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This is part of the problem, the director who requested the cuts has told them that overheads need to be reduced - the staff have asked for details of where the overheads are high so that they can do their best to reduce costs. He has refused to give them this information, which makes them feel that it is not a genuine claim.

joker538 said:

I work for a construction company. We have also been asked to accept a pay cut. I can see the reason for the paycut as I am involved in estimating work. We are unable to obtain new work as our costs/overheads are too high. In order to obtain new work it is necessary to reduce our costs.
While the company above is profitable if there are no pay cuts there is likely to be no work in 6-12 months time as jobs finish up and no new work replaces it.

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This is becoming a bigger problem across all industries, and needs to be addressed in a collective fashion, employers need to trust employees in the distribution of facts, and create a structure to redress cuts if things pick up.

crumdub12 said:

This is becoming a bigger problem across all industries, and needs to be addressed in a collective fashion, employers need to trust employees in the distribution of facts, and create a structure to redress cuts if things pick up.

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I agree; people need to feel empowered and enfranchised so that they are part of the solution. In my experience the more information (both good and bad) that you share with all employees the better. This builds a feeling of collective responsibility and helps people understand the interdependence of everyone within the organisation.