Reducing Employees’ Hours or Cutting Wages-Getting this Wrong Can Prove Costly for Schools

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Reducing employees’ hours of employment or cutting wages is very likely to be viewed as a fundamental change in a term of the contract.

cutting-wages

Accordingly, it cannot be carried out unilaterally.

The ideal is to only change the contract of employment with the agreement and consent of the employee.

In the school context, the Board of Management/VEC needs to firstly carry out a review of its financial and budgetary position and satisfy itself that the reduction in hours or cut in wages is necessary in this context.

It is strongly advised to meet with the employee and discuss the proposed change to the contract of employment and the necessity for it.

A letter setting out the proposed changes or a revised contract should be drafted and given to the employee and an explanation for the proposed and necessary change given.

If the employee agrees to the change, they should be requested to sign the letter setting out the proposed changes or to sign a new amended contract. Both employer and employee should retain a copy of the letter/contract.

In discussions with the employee, alternative proposals may be made by the employee. If these proposals are reasonable and allow the employer to achieve the necessary savings in the school, then they should be strongly considered.

If the employee does not agree to the change and the employer has no option but to implement the change and goes ahead and does so, there are a number of options open to the employee including

  • Referring the matter to a Rights Commissioner or to the Labour Court on the grounds of an unlawful deduction from his wages or
  • Leaving the employment and bringing a case for constructive dismissal or
  • Bringing a case to the Civil Courts for breach of contract.

Alternatively, if the employee is not prepared to work the new hours or reduced wages the employer may make the employee redundant. This may give rise to a claim for unfair dismissal if the redundancy is not a genuine one but a ‘sham redundancy’.

Layoff and Short Time

A short time situation arises where, due to a reduction in the work to be done, the employee’s wages or hours of work are less than half the normal weekly amount.

A layoff situation arises where the employer temporarily lays off the employee for a number of weeks.

It is worth noting that there is no general right in law to put employees on short time or lay them off, unless it is in the contract of employment or has been established as custom and practice in the workplace.

Learn more about short time, layoff, and redundancy here.

Conclusion

Many schools are facing a difficult budgetary and fiscal climate and have a need to reduce the hours or cut the wages of ancillary staff.

This needs to be carried out with caution as the consequences of getting it wrong can be expensive for schools.

Nevertheless, there is a growing recognition in all strands of society that savings need to be made and there may be a more pragmatic view taken by many institutions including the Labour Court, the Civil Courts, the Rights Commissioner service, etc.

By Terry Gorry Google+

Education Law Brochure

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