Salary Cuts
Sample Cases
CASE 03
Unilateral salary cut by company president deemed invalid
Case of Client G
Client G was working as a sales manager at a medium-sized trading company, and one day the president unilaterally declared that the salary of all employees would be cut due to poor performance.
He was later demoted for unfounded reasons, leading to a further salary cut.
Such actions continued to be taken against Client G until his salary had dropped to three quarters of what it had been at its peak.
Salary cuts deemed invalid and lost salary recovered
Disappointed by the president's treatment of him, Client G left the company and filed a lawsuit to claim the lost salary.
The ruling found that all of the salary cuts were invalid.
The company was ordered by the court to retroactively pay for the lost salary, and did so immediately.
Key Points
The above ruling was based on the company's failure to provide proof that Client G had agreed to the salary cuts, which was further supported by the fact that the company had not stipulated a position-linked salary structure.
Companies lacking proper compliance will often cut salaries at the discretion of a member of management such as the company president, but such arbitrary cuts are unlikely to be allowed.
If you are concerned about salary cuts, first check (1) whether the salary structure is properly stipulated and (2) whether you signed a document agreeing to the salary cuts.