What if you are asked to reduce your pay or your hours of work

When your employer has a downturn in business or there is less work for you to do, your employer may ask you to take a pay cut or to work fewer hours. If your employer tells you that he or she is unable to continue employing you on your current terms and conditions of employment you need to consider your employer’s request very carefully. You should ask your employer for details of the reduced business activity, who else has been asked to reduce their hours of work or pay and what were the criteria for selection.

Reduction of working hours or pay

If your employer asks you to work fewer hours or take a pay cut, this is a change to your contract of employment. Any change to your contract of employment must be agreed by both you and your employer.

If you receive a document being changed to your contract of employment, not signing it may not be enough!! You should respond in writing and indicate why you are refusing those changes and not signing it.

When deciding whether or not to agree to working reduced hours or to a reduction in pay, there are a number of issues to be considered:

  • Reduced pay – what are the implications of this – for example, money and tax and paying the rent or mortgage
  • Scheduling of working hours – it may suit you and your family to reduce your hours, for example working a day less per week or 2 hours less each day.
  • Downturn in business – what choice do you have. If you don’t accept a reduction in your working hours or pay, your employer may decide to make you redundant.

You should ask your employer to give you written details of this proposed change to your contract of employment including a review date. You should respond to this in writing and if you are proposing to accept the change, you should stress that your acceptance is temporary. There should be a precise date when, your temporary acceptance expiries. At the review date the change to your contract can be reconsidered and you could ask to return to the original terms and conditions of your contract.

If you do not agree to reduced working hours or pay

If your employer proposes to reduce your working hours or pay, this is a change to your terms and conditions of employment. You may agree to the reduction for reasons as described above.

If you do not agree to this reduction there are a number of options available to you:

  • You may make a complaint to the Workplace Relations Commission under the Industrial Relations Acts 1969-2015. Under this legislation, if your employer objects to a hearing by a Workplace Relations Commission adjudicator, you would have to refer the matter to the Labour Court.
  • If you say you wish to continue working as before your employer may decide to make you redundant. If you are dismissed in this way, you may qualify to bring a claim for unfair dismissal. Unless your employer can prove there was a genuine redundancy situation and that fair procedures were followed, this dismissal may be found to be unfair.
  • If your employer insists on reducing your working hours or pay you may also consider that you have no choice but to resign and claim constructive dismissal because your employer has breached the terms of your contract. Before you do this, you should always seek detailed legal advice as proving constructive dismissal can often be difficult.
  • If you think that a reduction in your pay or your working hours is a breach of your employment contract you could seek redress through the civil courts.

Lay off or short-time working

That is a completely separate issue if employer will rely on statutory provision fo lay off or short time. It is explained in detail in our other post.