On what conditions the salary of the employees be reduced (Is this legal)? - CiteHR
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Hi Seniors, Just need you advice under this circumstances.
I work for a services based Engineering company having turnover of 25Cr with a headcount of 400 employees. We have been unable to make profits in the last 2 financial years. Also there is major fund flow issue in the organisation resulting in delay in salary for employees and clearing statuary dues. There are various measure that the company is taking to come out of the situation. One of such measures is reducing all department head salaries.
Please suggest on what conditions the salary of the employees be reduced (Is this legal)?. Salary is the market value of the employees and which they earn over the years with their performance and effort. Has the company this right to play with it?. Can salary be reduced to only few employees or across the organisation? . Is company liable to payback the deducted amount to employees if situation gets improve? What are the formalities to be done to do this exercise to safeguard the both employee and employer interest?
what does the act say on such a condition?
Regards,
HRbuff.
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Hi HRbuff ,
Salaries once mutually agreed to & mentioned in the Appointment Letter / Letter of Contract can not be unilaterally reduced by the employer without employee's consent.
The other queries raised by you are therefore irrelevant.
Regards
Anil Raina
Mob: 9810180148
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