WHAT HAPPENS WHEN AN EMPLOYER DECIDES TO PUT IN PLACE PAY CUTS*

WHAT HAPPENS WHEN AN EMPLOYER DECIDES TO PUT IN PLACE PAY CUTS*

This issue arose in the case of Jennifer Healy and Excess Direct Insurance Brokers Ltd, ADJ-00030361.

In that case the respondent stated that they were in a very difficult financial position following the Pandemic and with Brexit sales dropping and the company decided to implement pay cuts rather than redundancies.

The Adjudication Officer in this case referred to Section 5 of the Payment of Wages Act.  One of the provisions of Section 5 is that in the case of a deduction, the employee must have given their prior consent in writing to it.  The Adjudication Officer stated that the complainant had never agreed to the deduction.  An award of over €6,000 was made.

This is a reminder to employers of the importance of making sure that if there is to be a salary reduction, that the employee’s written consent is obtained before the deduction is put in place.

*Before acting or refraining from acting on anything in this guide, legal advice should be sought from a solicitor.

*In contentious cases a solicitor may not charge fees or expenses as a proportion or percentage of any award or settlement.

Richard Grogan

Author Richard Grogan

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