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I've been demoted and had salary cut. Is this legal?


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I've worked as a manager in a company for about two and a half years now and yesterday I was told they were bringing in someone else to do my job, my position is staying more or less the same as it is but without the managerial side and that my salary is being cut by around £2000pa. This is from immediate effect and I had no prior knowledge that this was about to happen. At my last appraisal a couple of months ago I was given no indication that they were unhappy with my performance and today I discovered that my job has been advertised since last week. Whilst I'm not completely gutted that I'll no longer have the stress and responsibility that I currently have, I am pretty peeved at the salary cut. I moved to a new house especially so I could be close to work and I'm not sure I'll be able to afford to stay here now. The rest of the team were told about it today by the boss and they are now feeling shocked and afraid that their jobs could change at any moment. Surely before I'm demoted they have to go through some official procedures, discuss their concerns that I can't do the job (which I can) etc. Also I don't have a written contract, none of us do, so I don't know where I stand with that either. I've been told I could resign and claim constructive dismissal although I'm not sure what this would achieve other than rendering myself unemployed. Any advice would be really appreciated.

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If you are UK based you are entitled to have a contract of employment by law under Section 1 - 4 of the Employment Rights Act (assuming you are a bona fide employee).

 

Ask your employer for one tomorrow.

 

Ask for written reasons for the £2,000 pay cut, as that might require a variation of the contract (Section 1: 4 of the ERA) which needs your consent.

 

Investigate whether you are protected under the unlawful deductions section of the act, as you seem to have the qualifying length of service.

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I recommend you get advice from a union or specialist employment law adviser who would need to consider your contract.

 

The general position, based on contract law is that you can refuse to accept a variation of your contract. It takes agreement to change a contract and if you do not agree and communicate this clearly, you can enforce your contractual rights against the employer. It is unusual that the contract itself would allow for demotion and a pay cut, but occasionally these things are permitted as sanctions set out in a disciplinary or performance procedure.

 

If you intend to refuse a variation in terms or job functions, this should be done in writing. You can inform your employer that you do not accept a reduction in pay or the demotion and that he is liable to continue to pay you your old salary. Make it clear you are prepared to work your old duties. You can sue for your salary in the county court based on breach of contract, or make a claim in the employment tribunal for unlawful deductions in pay. You cannot bring a breach of contract claim in the employment tribunal unless your contract is actually terminated by you resigning or the employer dismissing you.

 

You can also resign and claim constructive unfair dismissal if the employers actions are a fundamental breach of your contract of employment and the employer did not act reasonably in treating you in this way. Any employee who wishes to resign over an employer's breach of contract should take advice because if you call this wrong and lose your complaint to the tribunal there is no going back.

 

You need to have one complete years service at date of termination to bring any kind of unfair dismissal claim. Employees who started work after April 2012 will need to have 2 years service to bring a claim.

 

A final course of action which you could give consideration to is standing your ground by refusing to accept the variation, and commencing proceedings to recover the pay. Your employer may then seek to impose the new terms by dismissing you with notice, but offering you a new contract on the revised terms and conditions. Workers sometimes succeed in bringing an unfair dismissal claim after the termination of their old contract by notice and their acceptance of the new contract under protest. It depends largely on whether the employer followed a fair procedure in imposing the new contract and what their reason was for doing this. It would be very likely to be unfair dismissal for an employer to dismiss you for refusing the unilateral variation of terms without offering you to re-engage you at the end of the notice period on the terms you objected to.

 

So for example, a firm who consults about the need to make salary savings, and has a good a reason (eg to avoid redundancies or closure of the business) might avoid liability for unfair dismissal and would have to pay the old salary until the old contract was terminated by notice. One who acts arbitrarily, without consultation and without a good reason may lose an unfair dismissal claim. If the employer has dissatisfaction with a workers performance or is undertaking a bona fide reorganisation he would be expected to follow performance procedures, or to consult transparently about reorganisation plans and have a fair way of matching up people with the new organisational structure. You will have to judge what is actually behind this and whether it has been done fairly.

 

This is somewhat complex law and nobody reading this should assume it will apply to their own case without going into it more carefully. But do take this as a pointer to how things might be taken forward and GET ADVICE. There can be a lot of tactics needed if you do intend to stand on your rights and force the employer into a position where he has to terminate your contract and re-engage you on the worse terms and STILL he may suffer a successful tribunal claim (for which the compensation could include an award for the difference between your old and new salary after you accept a new contract on worse terms). You are likely to need advice through the whole process if you hope to come out of this without losing your job and with a successful ET claim. And of course the employer may employ lawyers and correct some of the mistakes your employer appears currently to have made, to make it less likely that you can win overall.

 

Finally ... act quickly. If you delay in communicating that you do not accept the variation to your job title and pay you may be taken to have accepted a variation of your contract by simply acquiescing to it and not protesting.

Edited by RosaofEdge
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Thankyou everyone for taking the time to reply to my question, I really appreciate it. Before I even got a chance to make any decision on what to do about my demotion my boss sacked me on Friday. He gave me no reason and it was 100% unjustified and illegal. I will now have to take the matter to tribunal. I am going to contact ACAS and also the CAB to find out my next step. Its so unfair when people with money think they have the right to walk all over people and treat them so badly :(

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did he sack you in writing? Next thing you know you just didn't turn up on Monday...

Never assume anyone on the internet is who they say they are. Only rely on advice from insured professionals you have paid for!

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I have requested that he send me a written statement explaining all the reasons for my dismissal. So far I have nothing in writing but it was witnessed by the rest of the team so luckily he can't say I just didn't turn up. I will definitely be making an unfair dismissal claim. I'm interested to see his reasons because there was nothing I did wrong, all my appraisals have been very positive, in fact the only reason they got rid of me was because his wife took a dislike to me after I complained a member of their family who was on my team wasn't pulling his weight.

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