The bsaic salary cannot be reduced as per sec !2 of PF act if the employees are covered under the aforesaid act. To reduce the gross salarry of all employees either all of there peroforamce shoulld be non satisfactory or there should be business contraction problem owing to which the company is forced to give lay offs, but as an alternate you can reduce the salary after the discussin with employees.
This is Alok. I am a cite Hr member and have completed my MBA-HR,DLL and now working as HR trainee at Cosmo films public ltd. I will be glad to exchange ideas and share knowledge. As i have recently begun my career in this profession, i am also looking forward for professional networking.
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Please elaborate your query for what reason/under what circumstances you want to reduce the Gross Salary of all the employees, so as to give appropriate view
So where the salary reduction is not intended to pay for employers portion of PF, the department has not object to it.
So, legally there is no law saying salary can not be reduced.
However, this amounts to change of condition of employment and will be covered under the Industrial disputes act. Therefore, approval of the employees is required
It is universal law, according to me, you can not reduce the salary of any employee unilaterally. Employement is a contract. Terms of any contract are agreed by both the parties. Both the parties are abide to agreed terms of contract, legally. Therefore, I feel if you reduce the gross it will be illegal.
This is my specific and to the point answer to the queriest. I have not touched upon PF Law and ID Act which is out of contest here.
You can notice many debatable answers here. Because, you have not specified, why do you want to do this?
If a company has the power to remove an employee on some exceptional cases, they can reduce salary in some exceptional cases also. However, this can be challengable under court of law.
So, please don't think of doing things wich are un -exceptional. Systems are made for good reasons not for ones own convenience. Better educate your seniors for good practice.