pay cuts

Here we look at the differences between Pay and Wages; Unauthorised Pay deductions; Is your Employer obliged to pay you if you cannot get into work because of severe weather conditions or because their business premises are temporarily closed; Pay Cuts and Tips.  Updated April 2024.

For example, Pay Cuts

If your Employer is considering cost-cutting measures that includes pay cuts, then a pay cut should not be imposed upon an employee without their consent. They should seek your agreement and confirm the change in writing, informing you if this is a permanent change (or if there is a time limit).

If you do not accept the proposed change you should:

    • Make it clear, in writing, that you are working under protest or as a last resort
    • Resign on the grounds that your employer has breached your contract of employment by imposing a unilateral change (always take advice before pursuing this course of action).
    • In either case you should raise a grievance detailing your complaint. You will then be in a position to bring a claim for unlawful deduction of wages, breach of contract and/or, if you have resigned, constructive dismissal.

Your Employer, if you do not accept the change, may terminate your existing contract and re-engage you on a new contract. This is a dismissal so you could make a claim for unfair dismissal at an Employment Tribunal (although your employer will probably claim this was a fair dismissal for business reasons).


Tips, service charges, cover charges and gratuities don’t count towards the National Minimum Wage (so, for example, tips should be paid on top of the minimum wage).  There are currently no laws on tipping, but there is a voluntary code from the Government which you can read about on the Acas page here.

In 2018, the government announced they were to introduce a law prohibiting employers from retaining any percentage of an employees’ tips.  Several years followed… and then on 2nd May 2023, the Employment (Allocation of Tips) Act 2023 finally received royal assent, and this new law will come into force in October 2024.  A new Statutory Code of Practice was published in April 2024, that provides employers and staff with advice, and staff will have a new right to request more information about tips.  This will apply to all employees and workers (including agency staff and zero-hours workers). You can see the Government guidance here.

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