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The employer could choose to terminate the employee ’ s contract of employment by serving them with contractual notice and then offering a new contract on a lower salary . Should the employer decide to pursue this course of action , as long as the pay cut is justified and there is a valid business rationale and the process is legally compliant this will help to avoid costly tribunal claims .
However , do be aware that employees whose contracts are terminated , can bring claims for unfair dismissal , even if they have accepted the new contract . Consultation will be required if a number of employees are affected by proposals like these and an employer is legally obliged to consult . This may be with a trade union or employee representatives . Failing to do so could result in hefty compensation claims .
Results of a claim for unfair dismissal will depend upon :
• whether the employer can establish a substantial business reason for the pay reduction ;
• whether the employee would suffer disadvantages as a result of the changes and whether these outweighed the advantages to the employer of implementing the changes ;
• whether the employer had chosen to engage in full consultation about the salary cut ;
• whether a majority of the employees accepted the changes ; and
• whether the employer had acted reasonably when responding to employee objections .
The BBC case is rather unique . Partly funded by its licence payers ( to whom it is accountable ), it is very open to public scrutiny . It has a high profile with many of its presenters approaching or having reached celebrity status having become household names . Therefore , should the male presenters not have agreed to the reduced salary , the courts of public opinion may not have been so favourable towards those not agreeing to pay reductions and media type consequences would have been a distinct possibility . The issue of equality and fairness in the workplace has become priority , companies are being judged on how they conduct themselves .
The UK is one of the first countries in the world to put into place gender pay reporting legislation .
The legislation applies to companies with 250 or more employees , requiring these companies to publish statutory calculations illustrating any pay gap between male and female employees . It is a new era of transparency that many have welcomed .
One may argue that a logical answer to closing the gender pay gap would be to increase the wages of female workers rather than to reduce the wages of their male counterparts . However , as the BBC may well argue having paidhigh wages to big names , this wasn ’ t a financially viable option .
Unsure or just not confident ? Why not let Elcons Employment Law Consultants guide you through this process and all other Employment Law Issues call and discuss how we can support your business on 01422 822842 www . rugbyclubmag . com 13