Salary Structure Changes: Can Companies Legally Reduce Fixed Pay for More Variable Pay?

Dear Team,

I hope most of you are aware of the revision of the salary structure in some of the IT companies from 90:10 to 70:30 (fixed:variable). My company is also planning to follow the same. As per my knowledge, we can't reduce the fixed salary to increase the variable component as it's against the law. But I am not sure how other companies are doing it. Can anyone please advise me on this? Is it allowed to reduce the fixed component to increase the variable?

Commonly followed precedence is to implement any change with prospective effect, not retrospective effect, for the terms and conditions of employment being in the nature of a contract executed between the signatories need to be honored. Trust deficit is bound to tarnish trustworthiness.

These are my standpoints I espoused wherever I aided and advised the employer/management.

Harsh K. Sharan Kritarth Team, 1 Dec 2019