Guide to pay, wages, pay cuts, and ‘unauthorised deductions’

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; and Pay Cuts here.

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).

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