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1 Mar 2022 Unilateral changes to employment conditions, including a reduction in salary - is that allowed?

This article deals with the unilateral change of employment conditions by an employer (including a reduction in salary) within the framework of a restructuring and the question of whether this is permitted or not. What does the judge think about this?

In 2019, Stork saw itself forced to restructure and redesign the organisation. It has implemented a number of cost-saving measures resulting in compulsory redundancies. The Works Council has advised positively on this intended restructuring plan. The plan has been implemented. Restructuring II started in the first months of 2020. The decisions at the time were based on the first figures for 2020. The workforce was reduced by around 30 FTEs. In September 2020, all employees received a letter stating the Management Board's intention to adjust the salary grid. At the end of November 2020, Stork presented the final plan. The plan states that as of 1 January 2021, salaries will be structurally reduced by the percentage based on surrendering 11 ADV days. In addition, a reduction will be applied equal to the wage increase required by the CBA in the event of a reduction in the number of hours of scheduled non-working hours.

Employees contest the unilateral alteration of the employment conditions by Stork in legal proceedings.

It is not disputed that between the parties there is no unilateral change clause on which Stork can rely. In the absence of such a clause, an employee is in principle not obliged to accept proposals of an employer for a change of the terms and conditions of employment: agreement must be reached about this between employer and employee. There is no such agreement in the present situation. Stork takes the position that the implemented wage moderation can reasonably be demanded from the employees. The issue is therefore whether it is contrary to good employment practice not to agree to the salary proposal.

After all, when answering the question as to what consequences a change in circumstances can have for an individual employment relationship, it should be examined in the first place whether the employer, as a good employer, could have found reason therein to make a proposal to change the employment conditions, and whether the proposal made by him was reasonable. The Subdistrict Court is of the opinion that Stork has sufficiently substantiated with this that it, as a good employer, could have found reason in the changed circumstances to make a proposal for a change.
The next question is whether the proposal is reasonable and whether acceptance of the proposal can reasonably be demanded of the employees. The content of the wage sacrifice (both structural and temporary) is not such that it cannot be required of the employees, for example because it would cause them problems. The employees have not substantiated that it has far-reaching consequences for them. Stork has expressly requested employees to report, should they get into trouble as a result of the measure.

It has not become apparent that employees have reported to Stork. In light of all these facts and circumstances, the Subdistrict Court is of the opinion that it is not unreasonable to demand from employees a wage sacrifice such as the one in question. Within this framework, he mentions the following criteria: part of the wage sacrifice is temporary, there is a compensation arrangement, for the continuity of the company it was necessary to take these measures (employees will keep their jobs and therefore their salaries), alternatives are not available and, finally, it is also taken into account that the shareholder has also surrendered. Furthermore, the Subdistrict Court is of the opinion that a careful procedure was conducted.

You can read the original judgment here.

Would you like to know more about this judgment or about a reorganisation, restructuring or the possibility of unilaterally amending employment conditions? The lawyers at SPEE advocaten & mediation will be happy to be of service.

SPEE advocaten & mediation Maastricht


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