If you aim at reducing the cost by cutting the one day wages of daily rated workers, then it is okay, but if you aim at total reduction in cost of manpower then you have to do a lot of home work before proceeding further on it. Because the former one will give you direct result but the quantum of reduction will be very meagre since it is going to reduce only four days pay and that also when it is the one of daily rated people, you can imagine how big it should be. In addition to daily rated workers, if you want to make the salary of all including Executives reduced by 4 days a month, then you have to issue a notice under section 9A of the ID Act before 21 days of implementing the decision and take the staff in to confidence.
Normally, cost reduction by reducing salary for the days declared as holidays, even as a measure of cost cutting, will not be welcomed by the employees. This will create lot of mismatches in their family budgets and will the result will be total disappointment among workforce. Therefore, it is practically not possible to get employees concurrence.
By reducing the working days from 6 to 5, you are also getting benefits of saving in electricity costs, vehicle running expenses and many other costs. You can just aim at such costs and declare 5 days week. The pay bill of daily rated employees who are paid on the basis of days worked will automatically get reduced.
Legally speaking you are not expected to reduce salary of employees due to any reason including financial losses or cancellation of orders or accumulation of stock. These all are the head ache of the employer and not the workers. If you keep the workers pay as per existing pattern and ask them to work for 5 days so that at least some components of salary like tea allowance, heat allowance, shift allowance etc can be saved along with lots of savings on power and fuel, and ask the managers to sacrifice 4 days pay per month or take LOP for one day a week, then you can see the response. The persons who regularly complain about workers and show PPts in Management Reviews as part of company and very positive towards any changes will turn hostile and they would be the first to object the move. You can test it NOW.
Regards,
Madhu.T.K