Reduction Of Basic Salary Permissible ? - PDF Download

Dear Friends,
Is it permissible if an employees BASIC salary reduced while formulating the increments ? If it is unavoidable situation, is there any case law not to reduces the current Basic salary ?
Regards,
PBS KUMAR

Well Mr Kumar this question has already been raised and discussed here on this place.
Please visit below posted weblinks
- https://www.citehr.com/133851-can-ba...y-reduced.html
But i dont think one should go for deduction in Basic instead of making deduction in other allowances if it is required. Also there is no such rule and have never came across that you cant reduce the Basic salary.

Unless it goes below the basic prescribed in min. wages. No law is protecting the reduction in basic I think. Let us the opinions of lawyers in this forum.
Pon

Dear PBS Kumar,
Sec 12. of EPF : Employer not to reduce wages etc
No employer in relation to an establishment to which any Scheme or the Insurance Scheme applies shall by reason only of his liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme reduce whether directly or indirectly the wages of any employee.
Regards,
Rahul Bagale

Dear Rahul Saab,
Not only PF but also gratuity gets affected by reduction in Basic. so also has to be taken into consideration.

Here is the act:
Section 12-EPF-Employer not to reduce wages, etc.
No employer in relation to an establishment to which any Scheme or the Insurance Scheme applies shall, by reason only of his liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme reduce whether directly or indirectly, the wages of any employee to whom the Scheme or the Insurance Scheme applies or the total quantum of benefits in the nature of old age pension, gratuity, provident fund or life insurance to which the employee is entitled under the terms of his employment, express or implied.
EPFO <link updated to site home>

And to know the difference between Wages and Basic, please go thru the link <link no longer exists - removed>
"Wages" which is been used under this Section 12 of THE EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 is different with Basic and it is paid to employees working on hourly basis, daily basis or for a few day on replacement of any employee. Wages if paid on monthly basis it must follow Minimum wages according to that particular state. Also i have attached a doc for further understanding on this..

normally wages cannot be reduced as has already been enumerated above.
however there have been few dynamic cases wherein CEOs have reduced salaries by 30-50% across the board instead of reducing headcount.
in cases involving mergers too terms and conditions too are changed.