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Forcing a pay cut is likely to a result in a breach of contract

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There might be occasions when it is necessary to make a change to an employee’s contract of employment. However, there is a need to act reasonably when doing this and to have regard to the response of the employee.

In Decker v Extra Personnel Logistics Ltd [2018] the employee was a recruiter of HGV and lorry drivers, working in a recruitment agency. He originally worked 40 hours a week, but this was reduced to 32 hours. Due to a reduction in business the employer then sought to reduce his hours to 16 per week, which meant a cut in pay of £205 per week.

The employee said that this was not acceptable due to the financial implications and asked for a compromise of working 24 hours a week, with a slight increase in the daily rate of pay. He thought that the employer had accepted this suggestion, but some time later found that it had not been accepted and the employer was going ahead with the 16 hours a week proposal. He resigned and claimed constructive dismissal.

He was successful in his claims. The employer had acted unreasonably in forcing the change and had not recognised the concerns he raised as amounting to a grievance. It had not followed the Acas Code of Practice in reviewing the grievance situation.

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