Pay cut

[Silver]

Asking on behalf of someone else so forgive me if the details are sketchy.

Employer calls employees in and tells them they have to sign a new contract agreeing to a 15% pay cut. If they don't agree then they will be 'putting themselves out of work' (yes, I questioned this too).

I have not seen the contract, but I am asking to start with whether this is enforceable. I accept that many companies have had to make cutbacks and that's fine but can they tell employees that they have to sign a new contract or consider themselves resigned/sacked? What is usual/legal in this situation? Person in question has worked for the company for more than a year.

Thanks for your help.

[Mojooo]

I am sure someone will give a more detailed answer but I believe a couple of Councils have done this.

I daresay if a Council will do it then a private company will have no qualms at all and it will be legal as long as they give a decent amount of notice.

[GSP]

It's legal...

We had this at my previous employer... 12.5% across the board.

Following 3 months consultation, with external legal experts representing the employees, the paycut was implemented.

[rog007]

Capitalism, the free market and competitive actions at play; normal stuff.

[Honestherbert]

yep, legal as long as they give you enough notice period iirc. My place didn't cut our pay but did change the whole work shift pattern and increase the amount of "optional cover" that we were told we were going to opt to do! After everyone complaining it was pushed through as an "operational requirement" by the scum that is HR and acas said we didnt have a leg to stand on

[Amateurish]

The operates as effectively a termination of the old contract and rehiring on a new contract. So the termination will probably be unfair if there is a not a permitted justification for the termination, and all the correct procedures are not followed.