Implement pay cuts to avoid redundancies

Key points

  • Implementing a pay cut is one option that an employer might consider to save costs and avoid the need to make staff redundant.
  • As a pay cut will be a variation of the employees' contracts of employment, the employer should seek the consent of the employees to the change.
  • Effective communication of the reasons for the pay cut will be important. Employees may be prepared to accept the change if they understand that the alternative would be redundancies among the staff.

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