Can My Employer Cut My Hours and Pay?

13 June 2019

Your employer should not reduce your hours and/or pay without following the correct procedure. If you are forced to resign because your employer has reduced your hours or your pay, then you may have grounds to bring a claim of constructive dismissal. In England and Wales, workers are legally protected from dismissal, including constructive dismissal, and you could be entitled to make a claim to an Employment Tribunal for compensation.

Constructive Dismissal Explained

Constructive dismissal occurs when the actions of an employer result in an employee being forced to resign from their job.

In order for a claim of constructive dismissal to be successful, the employee must be able to show that:

  • the actions of the employer fundamentally breach of the employment contract
  • the employee's resignation was caused by that fundamental breach (and not something else)
  • the employee resigned in good time and therefore did not affirm the breach

Examples of action which might fundamentally breach an employment contract include an employer demoting an employee for no clear reason, or forcing them to accept unreasonable changes to the terms of their employment. A reduction in pay or working hours could be a fundamental breach of the employment contract in some circumstances.

Understandably, a reduction in pay or working hours could leave an employee with no other choice other than to terminate their employment. Under these circumstances, the actions of the employer could amount to a fundamental breach of the employment contract and could lead to a successful claim of constructive dismissal.

Worker Awarded £17,000 after Refusing to Accept Pay Cut

In February 2018, this situation formed the basis of a high-profile case before an Employment Tribunal.

In this case, Mr Decker had been working as a recruiter for a logistics recruitment agency for 8 years. He was initially employed to work 40 hours per week. In 2015, his hours were reduced to 32 per week then in 2017 he was asked to half his working hours, to 16 per week.

The reduction to Mr Decker's working hours would have caused him to lose around £102 per week and he responded to his employer stating that he could not afford to accept the proposed reduction in hours. Mr Decker did however offer to reduce his working hours to 24 per week if his employer agreed to increase his daily rate by £7.03.

In the initial correspondence, it appeared to Mr Decker that his employer had accepted his proposal. However, subsequently his employer confirmed that the business could not offer him the proposed pay rise and instead put forward an alternative employment contract for him to sign.

Four days later, feeling undervalued and as though he was being forced out, Mr Decker gave notice of his resignation. He then brought a claim of constructive dismissal in the Employment Tribunal, which upheld Mr Decker's claim.

In the judgement, the Employment Tribunal Judge stated that "a reduction of this magnitude was a serious matter" and it was found that the employer had "fundamentally breached" the employment contract. It was also found that the employer's response to Mr Decker's correspondence failed to adequately deal with the issue and as a result, the employer had failed to comply with the ACAS Code of Practice.

Mr Decker was awarded almost £17,000 in compensation.

How to Make a Claim for Constructive Dismissal

If you believe that you have grounds to make a claim for constructive dismissal, then it's important to gather as much evidence as possible (including emails, letters or text messages) and seek legal advice from an Employment Solicitor as soon as you can.

At Co-op Legal Services, our fixed fee prices for Constructive or Unfair Dismissal claims start from £630 (including VAT). This includes an investigation report, where we will undertake a comprehensive review your documents and advise you on your chances of success.

If we do take on your claim, then we will support you through the process, providing legal advice and representation as required, as well as negotiating with your employer on your behalf. We will provide you with an upfront fixed fee quote before any work starts. Once we have provided you with a written quote for the agreed work, that price will not change unless the original information we are given is shown to be incorrect or circumstances change.

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