Company wants us to take 20% cut
Discussion
As per title,for 3 months.
I work for a large international aerospace company and they have asked everyone across the company to take the temporary hit. This works out to about £500 per month after deductions for me and it’s too much. I am the only wage earner for a family of 5.
I have offered 5% over a longer period-8 months- which has been flatly rejected. It’s 20% or nothing with the threat of job losses if we do not comply.
The company (American) has lots of free cash in the bank and is clearly protecting its balance against the loss of business it is expecting. I get that but they are asking too much across the board. If I was to be made redundant how would a tribunal view the fact I tried to help but it was rejected?
Also there was a little rumour swirling around that if we do not take it they can lay us off with no redundancy under the COVID emergency powers. I don’t believe it but cannot find definite proof. Anyone know?
We all know the aerospace industry will not recover in 3 months and there will be redundancy so are we better rejecting and keeping the extra in our pockets?
Very tough times for all,and I appreciate that, but the simple truth is I have a family to provide for and that is my priority.
I work for a large international aerospace company and they have asked everyone across the company to take the temporary hit. This works out to about £500 per month after deductions for me and it’s too much. I am the only wage earner for a family of 5.
I have offered 5% over a longer period-8 months- which has been flatly rejected. It’s 20% or nothing with the threat of job losses if we do not comply.
The company (American) has lots of free cash in the bank and is clearly protecting its balance against the loss of business it is expecting. I get that but they are asking too much across the board. If I was to be made redundant how would a tribunal view the fact I tried to help but it was rejected?
Also there was a little rumour swirling around that if we do not take it they can lay us off with no redundancy under the COVID emergency powers. I don’t believe it but cannot find definite proof. Anyone know?
We all know the aerospace industry will not recover in 3 months and there will be redundancy so are we better rejecting and keeping the extra in our pockets?
Very tough times for all,and I appreciate that, but the simple truth is I have a family to provide for and that is my priority.
Hi, I am not aware of any emergency power that suspends employment law, specifically relating to redundancy terms.
Secondly, why won’t the company furlough staff in the UK ?
Difficult situation to be in, could you manage six months on the reduced wages ? its 3,000 GBP.
I know standard advice is to have three months wages in hand in a savings account, but with five on one wage I get that is not always possible,
Secondly, why won’t the company furlough staff in the UK ?
Difficult situation to be in, could you manage six months on the reduced wages ? its 3,000 GBP.
I know standard advice is to have three months wages in hand in a savings account, but with five on one wage I get that is not always possible,
Hi thanks for the reply.
Good to know regarding employment law,thought it was just shop floor talk.
That’s another bone of contention. They are furloughing quite a few but want the rest of us to take the same cut and keep on coming in for 12hr day/night/weekend shifts.
No I cannot afford a 3k hit. I have some savings,nota lot, and this would deplete them. If I was furlough then I’d have to manage but I’d rather not volunteer to give up 20%
The letter they sent out also gave my current yearly salary and a new revised one -20%. This mskes me think that any redundancy will be on the lower figure
Good to know regarding employment law,thought it was just shop floor talk.
That’s another bone of contention. They are furloughing quite a few but want the rest of us to take the same cut and keep on coming in for 12hr day/night/weekend shifts.
No I cannot afford a 3k hit. I have some savings,nota lot, and this would deplete them. If I was furlough then I’d have to manage but I’d rather not volunteer to give up 20%
The letter they sent out also gave my current yearly salary and a new revised one -20%. This mskes me think that any redundancy will be on the lower figure
Tough one.
Without revealing your salary, which band are you in? £50K+? £75k+? More?
If you agreed to it, you would need to word something to define when the 20% temporary reduction ends and that any redundancy would be on your contracted salary.
You mention that you can't take a £3k hit but if you got furloughed then you'd have to survive and that you have savings. So, this means you can take a £3k hit?
You need to decide how valuable your job is to you and assess your chances of getting another one at the same salary point, if your savings are so small and you're the sole earner. Is a worse-paid job whilst you search for something else better than no job at all?
Without revealing your salary, which band are you in? £50K+? £75k+? More?
If you agreed to it, you would need to word something to define when the 20% temporary reduction ends and that any redundancy would be on your contracted salary.
You mention that you can't take a £3k hit but if you got furloughed then you'd have to survive and that you have savings. So, this means you can take a £3k hit?
You need to decide how valuable your job is to you and assess your chances of getting another one at the same salary point, if your savings are so small and you're the sole earner. Is a worse-paid job whilst you search for something else better than no job at all?
Muzzer79 said:
Tough one.
Without revealing your salary, which band are you in? £50K+? £75k+? More?
If you agreed to it, you would need to word something to define when the 20% [_]temporary[_] reduction ends and that any redundancy would be on your contracted salary.
You mention that you can't take a £3k hit but if you got furloughed then you'd have to survive and that you have savings. So, this means you can take a £3k hit?
You need to decide how valuable your job is to you and assess your chances of getting another one at the same salary point, if your savings are so small and you're the sole earner. Is a worse-paid job whilst you search for something else better than no job at all?
Good points.Without revealing your salary, which band are you in? £50K+? £75k+? More?
If you agreed to it, you would need to word something to define when the 20% [_]temporary[_] reduction ends and that any redundancy would be on your contracted salary.
You mention that you can't take a £3k hit but if you got furloughed then you'd have to survive and that you have savings. So, this means you can take a £3k hit?
You need to decide how valuable your job is to you and assess your chances of getting another one at the same salary point, if your savings are so small and you're the sole earner. Is a worse-paid job whilst you search for something else better than no job at all?
Can you give a hint who this is Darren? I'm guessing either LM or B?
Hi
Way less than 50k on my basic. I get quite a good shift allowance and that is also affected which adds up to around £500 loss
If I was furlough I would have no choice but to survive. That would probably mean stopping my partners mental health counselling sessions which I pay for privately which is something I don’t want to do as she is making progress a long time. It would mean working with companies to delay repayments.
Given the choice to avoid all this I’d rather do that,particularly as I know job losses are coming after 3 months.
Mike it’s H if that helps.
Way less than 50k on my basic. I get quite a good shift allowance and that is also affected which adds up to around £500 loss
If I was furlough I would have no choice but to survive. That would probably mean stopping my partners mental health counselling sessions which I pay for privately which is something I don’t want to do as she is making progress a long time. It would mean working with companies to delay repayments.
Given the choice to avoid all this I’d rather do that,particularly as I know job losses are coming after 3 months.
Mike it’s H if that helps.
Is it voluntary, how is it worded? Do you have union support or membership as this is a way to get solid free legal advice.
My firm is furloughing 50% this month, 50% next month and also asking staff of certain grades for a 10% or 15% "voluntary" pay cut for six months after the furlough period is over. My firm is cash rich but also in survival mode as there is no clue how long things will last.
I've been there years so if they chose to make me redundant even on statutory minimum it'd cost the company far, far more than even a couple of years pay cuts would gain them. Makes sense to persuade a good percentage of staff to take a cut and save that money for later.
The difficult bit is the "voluntary" bit, in my case it's worded that if you really, really can't afford to take the temporary pay cut then you can decline and there will be no consequences. To me that's a green light for everyone to decline - past history shows the firm has a long memory and any future performance related pay reviews if the job survives will take back all the money they would have gained anyway. A lot of people also bend over backwards to help the company and want it to survive so will take the hit affordable or not.
I'm really torn as like you I don't really want to give away this money, dip into my savings slowly depleting them only to find myself out of job at the end of it anyway. It's a tough choice, only you can make though.
For the redundancy, use the gov.uk site it gives all the figures for the statutory minimum and how its worked out. If you've been there a while it won't be a massive amount but it does work out at lot more than I thought it was.
We as staff need to do what our employers are trying to do I guess, conserve the cash/savings we have as best as possible but keep that future income safe. It won't be easy to find a job in some trades for a long time to come.
My firm is furloughing 50% this month, 50% next month and also asking staff of certain grades for a 10% or 15% "voluntary" pay cut for six months after the furlough period is over. My firm is cash rich but also in survival mode as there is no clue how long things will last.
I've been there years so if they chose to make me redundant even on statutory minimum it'd cost the company far, far more than even a couple of years pay cuts would gain them. Makes sense to persuade a good percentage of staff to take a cut and save that money for later.
The difficult bit is the "voluntary" bit, in my case it's worded that if you really, really can't afford to take the temporary pay cut then you can decline and there will be no consequences. To me that's a green light for everyone to decline - past history shows the firm has a long memory and any future performance related pay reviews if the job survives will take back all the money they would have gained anyway. A lot of people also bend over backwards to help the company and want it to survive so will take the hit affordable or not.
I'm really torn as like you I don't really want to give away this money, dip into my savings slowly depleting them only to find myself out of job at the end of it anyway. It's a tough choice, only you can make though.
For the redundancy, use the gov.uk site it gives all the figures for the statutory minimum and how its worked out. If you've been there a while it won't be a massive amount but it does work out at lot more than I thought it was.
We as staff need to do what our employers are trying to do I guess, conserve the cash/savings we have as best as possible but keep that future income safe. It won't be easy to find a job in some trades for a long time to come.
We are on a 20% pay deferment for 3 months then reviewed up to 6 months until we are back in the office then salary will go back to normal and they will pay back the 20% reduction over the same period (i.e 3 or 6 months).
So although it's a bit tough at the moment we know we will get it all back eventually. I thought that was quite a good way to do it.
So although it's a bit tough at the moment we know we will get it all back eventually. I thought that was quite a good way to do it.
Providing the cut applies from the CEO and shareholder dividends to the lowest grade employee and it will ensure your job is "safe" then you have to seriously consider it.
How big is the pay cut in the event of redundancy?
Talk to your bank and building society about payment holidays, etc.
How big is the pay cut in the event of redundancy?
Talk to your bank and building society about payment holidays, etc.
Is there any opportunity for you to reduce your work if you're also reducing your pay? Work 4 days instead of 5, reduce your travelling to work expenses etc to help ease the burden?
Surely they must have a reason to want to cut your pay and furlough staff, otherwise they're making you work 100% but only pay 80% is a bit of a double kicker.
I too am in the aviation business but I am working from home, on 80% of my usual salary for 3 months, but don't have to drive anywhere, pay for childcare etc now that I am not at work and neither is my wife, so I can at least make savings. There must be a better way for them to cut this to make it a bit fairer.
And no, they can't just make you redundant without due process even with the new legislation.
Surely they must have a reason to want to cut your pay and furlough staff, otherwise they're making you work 100% but only pay 80% is a bit of a double kicker.
I too am in the aviation business but I am working from home, on 80% of my usual salary for 3 months, but don't have to drive anywhere, pay for childcare etc now that I am not at work and neither is my wife, so I can at least make savings. There must be a better way for them to cut this to make it a bit fairer.
And no, they can't just make you redundant without due process even with the new legislation.
My company has issued a flat 20% for all earners below Director level - no choice in the matter
I cannot afford this paycut, and when I challenged, the top brass stated they were protecting the future of the business, even though a number of staff have already been furloughed to protect expenditure and we also have a substantial amount of cash at hand, more than enough to cover the losses.
The business has also pressed ahead with a dividend this year, which would effectively cover the shortfall of the 20%, so morally a number of us have challenged this. The dividend may reflect previous FY, but could easily be used to offset the challenges.
It's a unique situation and the best I could come up with, after days of no sleep, is from a legal standpoint they cannot do this.
A change in your salary is a contractual change, and must be carried out over a period of time, through consultancy and ultimately with your agreement.
The best I could offer at present, was to say you did not agree to the pay reduction, but you would continue to work under protest.
A little bit of googling/employment law will elaborate on this for you
Best of luck
I cannot afford this paycut, and when I challenged, the top brass stated they were protecting the future of the business, even though a number of staff have already been furloughed to protect expenditure and we also have a substantial amount of cash at hand, more than enough to cover the losses.
The business has also pressed ahead with a dividend this year, which would effectively cover the shortfall of the 20%, so morally a number of us have challenged this. The dividend may reflect previous FY, but could easily be used to offset the challenges.
It's a unique situation and the best I could come up with, after days of no sleep, is from a legal standpoint they cannot do this.
A change in your salary is a contractual change, and must be carried out over a period of time, through consultancy and ultimately with your agreement.
The best I could offer at present, was to say you did not agree to the pay reduction, but you would continue to work under protest.
A little bit of googling/employment law will elaborate on this for you
Best of luck
I would suggest that the thing to consider here is.
If you refuse this and others accept this, are they likely to just furlough the staff that rejected the offer, and keep the others working.
Although the company is cash rich, how long are they likely to be cash rich for, they could be suffering losses for the next few years as a result of this, and therefore, if enough people reject this, it could ultimately lead to the company shutting down, and no one getting paid.
With regards to the Dividend payment, this is more than likely part of a contract, so for the company not to pay these would be a breach of contract.
This is a difficult time, and I would suggest thinking long term, would you rather take the hit now and help the company survive, or argue and potentially be out of work and trying to find a new job, when millions of other people will be out of work doing the same.
Just my thought on this.
If you refuse this and others accept this, are they likely to just furlough the staff that rejected the offer, and keep the others working.
Although the company is cash rich, how long are they likely to be cash rich for, they could be suffering losses for the next few years as a result of this, and therefore, if enough people reject this, it could ultimately lead to the company shutting down, and no one getting paid.
With regards to the Dividend payment, this is more than likely part of a contract, so for the company not to pay these would be a breach of contract.
This is a difficult time, and I would suggest thinking long term, would you rather take the hit now and help the company survive, or argue and potentially be out of work and trying to find a new job, when millions of other people will be out of work doing the same.
Just my thought on this.
helmutlaang said:
Also there was a little rumour swirling around that if we do not take it they can lay us off with no redundancy under the COVID emergency powers. I don’t believe it but cannot find definite proof. Anyone know?
That is not correct. Employment Law operates as normal even with Furlough namely a change in contract (eg to reduce the salary) must be agreed etc and can not be imposed.Floydey said:
My company has issued a flat 20% for all earners below Director level - no choice in the matter
I cannot afford this paycut, and when I challenged, the top brass stated they were protecting the future of the business, even though a number of staff have already been furloughed to protect expenditure and we also have a substantial amount of cash at hand, more than enough to cover the losses.
Well your choice is to accept it or consider legal action - whether that be for Constructive Dismissal or otherwise...I cannot afford this paycut, and when I challenged, the top brass stated they were protecting the future of the business, even though a number of staff have already been furloughed to protect expenditure and we also have a substantial amount of cash at hand, more than enough to cover the losses.
Jasandjules said:
Well your choice is to accept it or consider legal action - whether that be for Constructive Dismissal or otherwise...
This is what led me to the 'working under protest'.I'll see if I can find the original legal jumbo on it, but ultimately it was rejecting the terms but not quitting/going constructive dismissal, with a view to looking to recover the lost salary if/when the company returns to better times
(bearing in mind, on a recent dial in, we are still picking up new business and the forecast is still optimistic)
helmutlaang said:
I have offered 5% over a longer period-8 months- which has been flatly rejected. It’s 20% or nothing with the threat of job losses if we do not comply.
The company (American) has lots of free cash in the bank and is clearly protecting its balance against the loss of business it is expecting. I get that but they are asking too much across the board. If I was to be made redundant how would a tribunal view the fact I tried to help but it was rejected?
How much have the CEO, Board and other senior management taken as a cut?The company (American) has lots of free cash in the bank and is clearly protecting its balance against the loss of business it is expecting. I get that but they are asking too much across the board. If I was to be made redundant how would a tribunal view the fact I tried to help but it was rejected?
Smurfsarepeopletoo said:
With regards to the Dividend payment, this is more than likely part of a contract, so for the company not to pay these would be a breach of contract.
I assume the OP also has a contract with a number written somewhere near the top. Why does a contract regarding dividends trump this? Is there a difference between PLCs and Ltd companies?Gassing Station | Jobs & Employment Matters | Top of Page | What's New | My Stuff