LETTERS: Pay cuts are one of many cost-cutting measures adopted by employers as a means of reducing overheads, what with the current Covid-19 pandemic that has impacted businesses and the economy.
Other measures include freezing new hiring, introducing unpaid leave, removing certain allowances, requiring employees to take annual leave and reducing the number of working hours per day.
Generally speaking, your employer cannot cut your pay without your consent. If your employer has applied for Socso's wage subsidy programme, you cannot be asked to take a pay cut.
So, what are your options when faced with a proposed pay cut?
1. Agree to the pay cut. This is the simplest option. You get to keep your job and your employer gets to cut your pay, thereby reducing business expenses for the month. However, this is not really an option if you are in a difficult financial position.
2. Disagree with the pay cut and continue working. If your employer does not unilaterally cut your pay, life goes on. However, in the long run, this may not be sustainable for your employer who may then resort to a retrenchment exercise.
If you have only recently joined the company, you are at risk due to the last-in first-out general retrenchment principle.
If your employer unilaterally cuts your pay, you have the option of quitting and reporting the matter to the Industrial Relations Department. The matter may then be referred to the Industrial Court.
3. Disagree with the pay cut percentage/amount and counter-propose a smaller pay cut. In reality, however, employers are generally not open to negotiation.
4. Disagree with the pay cut and propose a mutual separation. This is where you and your employer agree to part ways and your employer pays you RMx as separation benefits. Usually RMx is one month's salary for each year of employment. However, this is negotiable.
In summary, the viability of each option depends on your particular circumstance. Know your rights and options before making an informed decision.
Joshua Wu Kai-Ming
Kuala Lumpur
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times