1st July 2004
From a non-legal point of view, lowering the salaries of employees as a result of a merger is not an appropriate decision and/ or action to take.
It will create a lot of demoralization among employees. It can also result to union unrest and strike.
In many mergers that I know, the salary issue is either "constant" (status quo) or "upward".
The dominant and surviving organization in mergers normally has better salary rates than the company that is absorbed.
But, when the surviving entity takes over a company that has higher salary rate, it is presumed that the company is ready to adjust its rate to the level of the newly acquired company.
Hence, the normal employee reaction is positive and hopeful, although the new organization can always decide to have a "temporary status quo", to avoid any additional cost arising from the merger.
Ed Llarena, Jr.
20th July 2004 From Philippines, Parañaque