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Results 1 to 15 of 15
  1. #1

    Talking

    The company that I was working for asked me to take a pay cut. I asked them what my alternatives were, and my boss said that I didn't have any. She said accept the pay cut or leave the company, so I just left. For me, it was a simple decision, but for others, it may not be as easy.

    A review of the Labor Code will show us that it is illegal for your boss to reduce your salary because of the company's poor performance. At least that is how I interpret it.

    Brief Excerpt from the Labor Code 1998 Version.



    The Labor Code
    1998 Edition
    Title II, Chapter IV: Prohibition Regarding Wages

    Art. 113. Wage Deduction

    No employer, in his own behalf, or in behalf of any person, shall make any deduction from the wages of his employees except:


    (a) in cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance;

    (b) For union dues, in cases where the right of the worker or his union to check off has been recognized by the employer or authorized in writing by the individual worker concerned; and

    (c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor.

    Art. 117 Deduction to ensure employment.

    It shall be unlawful to make any deduction from the wages of any employee for the benefit of the employer or his representative or intermediary as consideration of a promise of employment or retention in his employment.



    [This message has been edited by Noisy Cricket (edited 08-14-2000).]

  2. #2

    Lightbulb

    hmm, so it's "better" to lay off workers instead? like the US dot.com's...


  3. #3

    Talking

    Noisy Cricket: I'm just wondering, are you going to do anything about this?

    Technically, laying off is acceptable, if the company is really losing money. But I believe you should get separation pay. Did you get one?

  4. #4

    Talking

    I don't think either is acceptable, and I don't you think so either. Hard times are in store for all companies, big or small, but there must be more alternatives than cutting into an employee's wages. It may not affect the employer himself per se, or even the company, but I am certain it will have a more negative effect on the life of the employee. From the company's perspective, he may just be an employee, but from the employee's point of view, this is his livelihood. When you cut into someone's wages, you are cutting into more than just his market value, you are cutting into his dignity and his self-respect. It becomes even more so pronounced if the employee has been singled out unfairly, and deductions were not made across the board. Perhaps there are even scenarios, for all we know, that the employer's salary itself, remains the same, while those salaries of his employees is reduced. That is another form of injustice, I believe. In a business model, it is the management, and not the rank and file who make the final decisions. It would be unfair to punish someone for occurences and events that were not his responsibility.

    I don't believe mine is a unique case. There are others out there who are similarly affected. Our job, as future employers, is to understand this particular labor issue, and be sure to propose solutions against it in the future.

  5. #5

    Lightbulb

    alas... financially speaking, people's salaries are also expenses... so if you need to stop the bleeding, you might have to let go? it's not punishment.

  6. #6

    Talking

    I agree. I'm sure Noisy Cricket is just affected 'cause he was a 'victim'. However, companies should do this THE RIGHT WAY. That's what I'm asking about. Were you given separation pay?

  7. #7

    Talking

    I hear you, man. If I had to lay-off people, I would, but only as the absolute last resort - and I would make sure they at least had a place to go to afterwards.

    As for the bleeding, I would ask myself what caused the bleeding - did I make some wrong decisions along the way? If I was responsible for the company's poor performance, I would take it out of my paycheck.. not my employees. It wouldn't be their fault, because I was the one making the decisions. In other words, I would not let other people pay for my mistakes.

    And yes, it is not punishment in the way that you explain it. At least, it is not the driving force behind the action. You had to make the choice to lay-off some of your workers.

    Perhaps punishment is too strong a word. But in cases where management does allow its employees to feel the effects of its own shortcomings, then while punishment may not be the agenda of the employers, (at least it should not be) the people who will still have to bear the brunt of the cutbacks will still be the employees. He will suffer from a reduction in wages, or in the case that you explain, a loss of employment. It would result in a similar form of "punishment" where the end-result is the same, although, yes, non-directly desired by the employers, and quite possibly, undeserved by the employee as well.

    Let's develop a better way.

  8. #8

    Question

    I'm just wondering... Please correct me if I'm wrong... Isn't it that upper management should get the first paycut, even before the employees? I know some people who started their own businesses who did this.

    Anyone?

  9. #9

    Talking

    Originally posted by CaRaMBa:
    I'm just wondering... Please correct me if I'm wrong... Isn't it that upper management should get the first paycut, even before the employees? I know some people who started their own businesses who did this.

    Anyone?
    Yup! My point exactly.. The employees will always be harder hit than the employers.


  10. #10

    Talking

    I'm not defending anybody here, but...

    1 The members of "upper management" are also employees. If anyone should get hit first because the company is faltering, it should be the owners. Now, if it so happens that the owner is also managing the company, then, yes he should take a hit first, because he is the owner.

    2 Even if it is illegal to ask you to take a pay cut, signing an agreement for the new salary rate results in a new contract between you and the employer. You might weaken your case against your employer should you decide to sue in the future. Before anyone signs anything, consult a labor lawyer.

  11. #11

    Talking

    If the company made you choose "paycut or leave" - is that legal? Basically you end up leaving because you don't want the paycut.

    KuyaDanny, I stand corrected, I meant owners, not upper management. Nowadays kasi it's usually the same. Usually lang.

  12. #12

    Talking

    Originally posted by KuyaDanny:
    2 Even if it is illegal to ask you to take a pay cut, signing an agreement for the new salary rate results in a new contract between you and the employer. You might weaken your case against your employer should you decide to sue in the future. Before anyone signs anything, consult a labor lawyer.
    Hmmn. A friend of mine says that even if you sign a new contract, Philippine laws are constructed in a way such that signing a different contract does not automatically negate your rights, and there are still mechanisms against this kind of undue pressure from the part of the employer to make the employee sign a different contract. He says that:


    This is what I've been telling you all along. No employer may reduce your wages. Neither may they force you to sign a contract stipulating this.
    Even if you sign the contract, you can still sue, because the labor code and the constitution protect you from ever having to "sign away" or give
    up your rights. No person's basic human rights may be abridged, curtailed or waived, even if the person signed a document expressly permitting
    the waiver of these rights. Such a document is unlawful and unconstitutional.

    If you have a contract, you can fight this.
    hehehe. His version sounded better

    [This message has been edited by Noisy Cricket (edited 08-14-2000).]

  13. #13

    Talking

    Originally posted by CaRaMBa:
    If the company made you choose "paycut or leave" - is that legal?
    I don't know exactly how the lawyers will approach this, but it seems to me that if "status quo" wasn't part of the choices available, there should have been good (and equally legal) reasons it was taken out.


  14. #14

    Talking

    Good for you, Noisy Cricket. It seems your friend is ready to represent you in the court of law.

    I hope anyone else who reads this and is in a similar situation isn't too quick to sign any piece of paper thrown his way.

  15. #15

    Talking

    Originally posted by KuyaDanny:
    I don't know exactly how the lawyers will approach this, but it seems to me that if "status quo" wasn't part of the choices available, there should have been good (and equally legal) reasons it was taken out.

    KD, for clarification, what would some of those legal reasons be? I'd still be interested to know in any case this happens again in the future. People heard about my predicament, and strangely, they said that their previous bosses were doing it to them as well. That's bad.. What can we do to protect ourselves in the future?


    [This message has been edited by Noisy Cricket (edited 08-14-2000).]

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