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WA Can Employer Force Non-negotiable Payment Cuts to Employment Contract?

Discussion in 'Employment Law Forum' started by Michael Berry, 15 June 2016.

  1. Michael Berry

    Michael Berry Active Member

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    I took a $14400 salary cut 12 months ago in order to keep my job. Last week, I was asked to take a further cut of $19200. My Job description has also changed increasing my workload by 85%.

    My Work Life/Home Life Balance has been destroyed. My boss has stated the amendment to the employment contract is non-negotiable and if I don't agree I will be made redundant. My coworkers have received 1 pay cut of 10-15% which is temporary whereas mine is permanent.

    Can they force me to agree to this unfair and frankly bullsh*t proposal?
     
  2. Victoria S

    Victoria S Well-Known Member

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    Are you on a contract of specified length? Or are you just permanent full time?
     
  3. Sophea

    Sophea Well-Known Member

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    First, check your employment contract - if it includes a term that allows an annual performance review including wage review then your employer may be able to reduce your salary. In the absence of a contractual right an employer can't reduce your wage below that specified in the applicable Award or enterprise agreement or the relevant the minimum wage (which is I'm sure not what you want to hear because your salary is likely well above the minimum wage).

    So here's the positive news, in some circumstances, a reduction in remuneration may amount to ‘constructive dismissal’, if you have been forced to resign from your employment because of conduct, or a course of conduct, by your employer. This occurred in the case of Johnson v Zehut Pty Ltd [2014] FWC 7496 where an employee was forced to resign after not accepting a pay cut from 80K to 54K due to "difficult business conditions" When the employee indicated she would not be accepting the reduction, she was advised that this was taken by the employee as her resignation. She was awarded 14 weeks pay as compensation.
    .
     
  4. Michael Berry

    Michael Berry Active Member

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    Sophea.

    My contract does state annual review. My work hours have increased substantially. My responsibilities have increased substantially. My pay cut is 25% whereas my coworkers have only received a 10-15% pay cut. The pay that has been cut is labelled in my contract as guaranteed income.

    My employer has told me if I do not sign the contract amendment I will be made redundant. My fellow employees have a clause in their agreement which states that their pay cut is temporary and will be reinstated once the industry recovers. My cut is permanent.
     
  5. Michael Berry

    Michael Berry Active Member

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    Victoria. I am a Permanent Staff.
     
  6. Yevgeni

    Yevgeni Well-Known Member

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    Hi Michael,

    Before you make any decision as to whether your situation amounts to constructive dismissal and consider yourself to be constructively dismissed as a result of the situation, you have to actually make sure that you are protected from unfair dismissal (i.e. that you have been employed for a minimum period of employment and are not earnings above the high-income threshold etc). You, also, have to make sure that the Fair Work Act 2009 (Cth) will apply to your situation.

    An unfair dismissal claim may be one option (i.e. an argument that your consider yourself to be constructively dismissed, because the changes to your position are so significant with such severe implication etc), however, you may have other options available to you such as bringing a general protections claim, whilst you are still employed, if, for example, your pay cuts were or may be as a result of you exercising workplace rights such as making complaints or enquiries in relation to your employment or for some other reason such as a disability etc.

    If this is the case, you may be better of bringing a general protections claim and not terminate your employment and try and negotiate a different outcome or some sort of separation payment etc, before terminating your employment and alleging constructive dismissal (which is not always an easy argument).

    As to whether your employer is allowed to reduce your pay, I would really need more information about your situation and position as well as all of the surrounding circumstances. If your employment is subject to an Award, the employer cannot contract out of the terms of the Award, unless the contracted terms are equal to or better than the terms of the Award.

    In order to properly help you, I obviously need more information from you and you are more than welcome to give me a call if you would like more information about your situation at no obligation free of charge. I, also, often act frequently for employees in unfair dismissal claims and general protection claims on a no win no fee basis, so if you do have a case that is worth pursuing I will be able to assist you on the same basis.

    Please click on the link Benjamin Nicholson Law, Sydney NSW - LawAnswers.com.au Find a Lawyer if you want to discuss what options are available to you.
     
  7. Yevgeni

    Yevgeni Well-Known Member

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    Hi Michael,

    Further to my post above, I had a look at your previous posts on this forum and if these relate to the same employer then you should definitely look at a potential general protections claim.
     
  8. Michael Berry

    Michael Berry Active Member

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    All posts are related to the same employer. I don't think I am above the high income earner threshold. I have been with this employer for 3 years. I am definitely not on an award as my company has no registered agreements with Fair Work. I started with this company when I entered the Oil and Gas industry. I left as I was underpaid and overworked. I was offered a very good position and returned some years later (should have learned my lesson) only to have everything I came back for taken away.

    My only concern is cost of legal advice/action and the fact that the Oil and Gas industry is so slow if I don't agree and I'm made redundant I will lose everything. My employer is using this as leverage to force down salaries as they know finding another job is near impossible at this time. I'm in Perth.

    Can I call you on Thursday 23rd?
     
  9. Yevgeni

    Yevgeni Well-Known Member

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    Yes. Thats is fine. If I am unavailable, please leave a message and I will call you back.
     
  10. Michael Berry

    Michael Berry Active Member

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    Yevgeni,

    Who should I ask to speak to when I call?
     

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