staff-wide pay cuts without explanation. what do?

FapCop

FapCop

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Its pay day, hooray! A close friend discovered a huge chunk of her wage gone today. Her boss said its new "deductions". Staff meeting is happening on Friday to explain what the new deductions are for.

We're talking about an approximate 35% drop in pay. Everyone that works there. No explanation yet, but money is already deducted.

Can anyone point to what legal/labor department to report this to?
 
Start looking for new job. Sounds like company is in trouble.
 
There's going to be some creative explanations at that meeting!

How large is the company?

Say the company says the reason is financial difficulties and you believe its a hoax to try screw the staff or say its management is trying to bleed the company before it gets announced its going into liquidation. Can you force them to honour your contract no matter what or is there legal basis for a company unilaterally reducing wages?

Another good question that must be asked is will the wage reduction be across the board, ie from the lowest paid right up till management?
And written evidence of said reduction being across the board, ie sworn affidavit or similar?
 
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No deductions are allowed from a salary unless you agreed to it, against the law...

Salary decreases may be one thing, but a reduction in salary isn't the same as a deduction. Payslips (if you / she gets those) should clearly indicate what these new deductions are, and I'd very quickly run towards the CCMA or Dept. of Labour afterwards, especially on a 35% amount.

You are also *required* to receive a payslip (clearly indicating deductions) on the SAME day, that you are paid. Their excuse of explaining on Friday (i.e. a few days later) what the deductions are, is already illegal and as such that are in breach of the basic conditions of employment.

Deductions and other acts concerning remuneration
34.
(1) An employer may not make any deduction from an employee’s remuneration unless—
(a) subject to subsection (2), the employee in writing agrees to the deduction in respect of a debt specified in the agreement; or
(b) the deduction is required or permitted in terms of a law, collective agreement, court order or arbitration award.
(2) A deduction in terms of subsection (1)(a) may be made to reimburse an employer for loss or damage only if—
(a) the loss or damage occurred in the course of employment and was due to the fault of the employee;
(b) the employer has followed a fair procedure and has given the employee a reasonable opportunity to show why the deductions should not be made;
(c) the total amount of the debt does not exceed the actual amount of the loss or damage; and
(d) the total deductions from the employee’s remuneration in terms of this subsection do not exceed one-quarter of the employee’s remuneration in money.
(3) A deduction in terms of subsection (1)(a) in respect of any goods purchased by the employee must specify the nature and quantity of the goods.
(4) An employer who deducts an amount from an employee’s remuneration in terms of subsection (1) for payment to another person must pay the amount to the person in accordance with the time period and other requirements specified in the agreement, law, court order or arbitration award.
(5) An employer may not require or permit an employee to—
(a) repay any remuneration except for overpayments previously made by the employer resulting from an error in calculating the employee’s remuneration; or
(b) acknowledge receipt of an amount greater than the remuneration actually received.
Click to expand...
 
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Go for the jugular and don't accept it.
Probably never been paying tax over or something like that.
It's illegal without prior consultation and a notice period equal to your termination period.
 
Company is dead/dying.

Only reason to do something that blatantly obvious & illegal is if there literally isn't any cash left. Hope you have a rainy day fund. :(
 
Yea, she sadly has no rainy day fund. It's a large national franchise, not going to give any names, at least not yet. There's three branches in PMB alone.
 
savage said:
No deductions are allowed from a salary unless you agreed to it, against the law...

Salary decreases may be one thing, but a reduction in salary isn't the same as a deduction. Payslips (if you / she gets those) should clearly indicate what these new deductions are, and I'd very quickly run towards the CCMA or Dept. of Labour afterwards, especially on a 35% amount.

You are also *required* to receive a payslip (clearly indicating deductions) on the SAME day, that you are paid. Their excuse of explaining on Friday (i.e. a few days later) what the deductions are, is already illegal and as such that are in breach of the basic conditions of employment.
Click to expand...

Further to this, while a reduction in salary is legal, it should be done in a well documented consultation process.

Edit: agree with others, its a early warning sign that the company is in trouble. Find other work, resign, take to CCMA, your employer will be forced to pay back the difference.
 
I suspect that even if she won in a labour court/CCMA, it would be a hollow victory because they are going under. Tell her to get a new job ASAP.
 
While salary cuts are legal (after consultation). What they have done is illegal. You can't cut someone's salary and then only tell them after they have been paid.
 
gregmcc said:
While salary cuts are legal (after consultation). What they have done is illegal. You can't cut someone's salary and then only tell them after they have been paid.
Click to expand...

Yeah that is true.

So I wonder, which is better? Everyone gets a paycut, but keeps their jobs, or some leave and some don't get paycuts and keep their jobs.
 
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