My work introduced a 10 per cent pay cut almost two years ago. It was done verbally and nothing was in writing.
In that time, we have had no updates, no annual reviews and no communication on it. I want to ask for my salary to be restored in full. I also want to ask for a 10 per cent pay rise to compensate me for lack of earnings and for the pressure it has put me under financially.
Do I have an argument for the above requests? Can I demand that my full pay is restored? If they refuse, do I have any options? I am increasingly annoyed and upset by this but find it difficult to approach them about it.
It is uncommon for a pay cut not to be communicated in writing. However, in the absence of any objection, the reader and their colleagues may have created a custom-and-practice arrangement.
RM Block
Moira Grassick, chief operating officer at employment law and HR firm Peninsula Ireland, says failure to communicate any details of a pay cut in writing is “unusual” and “not best practice” for an employer.
Ideally, employers would facilitate a consultation period with employees before any salary deduction and give at least 30 days’ notice before any change is introduced.
Employees would also typically receive a written notice outlining the change in salary as an addendum to their contract, Grassick says.
Regardless, it appears the reader and their colleagues have not objected to the pay cut and have continued working under this new arrangement.
“If it was two or three months ago, they might have had a stronger case. The fact that it was two years ago makes things a little bit more challenging,” says Grassick.
“Ultimately, there is a verbal agreement now in place and the fact that it’s gone on for 24 months would be an argument to say that it’s custom and practice.”
Custom and practice refers to unwritten workplace rules, perks, or habits that are not in a written contract. Over time, if done consistently, these actions can become legally binding and implied terms of employment.
Grassick adds: “That makes it much more challenging for them to take any action from a legal perspective. They’ve created a custom that is assumed to be agreeable.”
[ My redundancy was fraught with error. Can I seek compensation?Opens in new window ]
Typically, an employee who feels their salary has been reduced without agreement can argue a breach of contract. They can also lodge a complaint with the Workplace Relations Commission (WRC), but there is typically a six-month time limit for lodging such disputes.
“I think the best course of action at this point in time would be to speak to management and see whether there’s a possibility that those increases could start coming in again,” she says. “Whether or not they get the answer they want is another thing.”
Michelle Halloran, independent HR consultant and workplace investigator, says if employees do not disagree, “it means they agreed”.
“There’s a lot of good faith in this. If an employer is going to do this, they are saying the only way they can keep the jobs is if they all take a pay cut,” she says.
However, Halloran adds that updates should be provided and pay cuts should be reviewed regularly in the interest of employee relations and retention.
She advises contacting senior management about the pay cut and seeking an update on pay restoration.
“There’s power in numbers for something like this. If there are others similarly affected, and if a group of them went to management saying they want this fixed, it’s a stronger voice than one person.”
