Question posted in the General Law category relating to Gauteng
LABOUR LAW - need to understand my rights and options in regards to a proposed salary decrease
I've been working for a small consulting company for about 5 years, and moved onto a part time hourly arrangement about 2 years ago. My boss (the owner) contacted me recently to negotiate my hourly rate, he is insisting on a permanent ~25% cut effectively immediately (he wanted to make it retroactive but back off from that). I have indicated that I cannot agree to it. I understand that he feels this is an affordability issue.
I am considereing quiting my job, but realise that I need to protect myself legally from contract breach and ensure I receive any owed severence benefits (if applicable). What are my rights and options in regards to a unilateral change like this? Is he within his rights to change my salary? If I do not agree, can I "force" him to retrench me, or what are my options?
Information Requested by Lawyer
Hi there and thank you for your question,
I am a practicing attorney based in South Africa and I will assist you with your question. Please feel free to ask as many follow up questions in order to clarify your question. If you have a new question, you must please open a new thread.
Please keep in mind that our discussions is for general information purposes only. Our engagement on this website does not create an attorney-client relationship.
Do you mind if I take a moment to review your question? I will come back to you shortly!
Answer to the Question
Okay, so I assume that you are permanently employed by the company (i.e. you go to work there every day; it's not a case of working sometimes - you consider yourself to be an employee) and that there is an agreement (oral / writing) about your duties and your salary.
If this is the case, then one can only change the terms of your employment if there is agreement. Your employer can't unilaterally change any of the terms of your employment - including reducing your salary.
What the employer can do is to say to you, either we need to retrench you or you need to agree to reduce your salary. But then there would need to be proper grounds for a retrenchment - he couldn't engineer a retrenchment.
I don't know if you should simply quit your job, because at the moment you have rights. If he wants to retrench you, then he must do so, but he must also then pay you severance pay and pay out your leave. If you quit, you don't get this.
You also can't force him to retrench you... but you can suggest that this is a possible route. i.e. you can't reduce my salary, but I won't fight you if you retrench me - with all of the benefits of a retrenchment, including severance pay, leave pay, and a letter of recommendation.
Information provided by client
Let me clarify my employment situation, in case it has any bearing on the response you provided:
I receive a monthly payslip and IRP5 from the company, with the value of the pay based on the amount of project hours I worked and logged. The amount of hours varies between 10 hours and a 100 hours a month, based on the amount of work that is assigned to me or the phase one of our projects are in (consulting firm). I work from home, with discretion on when I work, unless there are external client meetings I attend. When I was still working full time I received a contract for the permanent position, and then we signed a memorandum of understanding when I went to part-time / ad-hoc hours. The MoU clarifies how my rate is to be calculated (which he now wants to change) and states that any changes to my hourly rate will be "mutually agreed upon".
Could you direct me to a resource that explains the retrenchment process and obligations to me in layman's terms?
Answer to the Question
"I receive a monthly payslip and IRP5 from the company" --> then you are definitely an employee.
"The amount of hours varies between 10 hours and a 100 hours a month" --> Since you work more than 24 hours for the company for a month, you are definitely a permanent employee.
"...and states that any changes to my hourly rate will be "mutually agreed upon." --> exactly, this is why he wants to include that recordal. You must just not agree to the changes of your hourly rate.
Have a look at this link: HERE