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Pay Cut

Thu, 26 Mar 2009 04:31:27 PM  (Last updated: Mon, 06 Apr 2009 03:18:22 PM)

Hello KL

I hope you are keeping well. I come to your site occassionally to get info. about labour law in Malaysia =)

My company has the intention to cut our salary by 5-10%. Is that legal? I believe we as employee has to agree to the cut. Is that correct?

If in case we do not sign the acceptance of the pay cut, what action can the company take besides terminating us?

Thanks in advance for your advice.

KL Siew
Thu, 26 Mar 2009 04:55:44 PM

Company cannot simply reduce the salary of the employees without valid reasons. If you do have valid reasons, company must discuss with the employees concerned and get their consensus. If the pay cut has something to with the current economy downturn, the company better consult the Labour Department first before pay cut is implemented.

Fri, 27 Mar 2009 02:42:53 PM

Thanks for your affirmation :)

Fri, 03 Apr 2009 05:02:46 PM

My company decided to 10% pay cut due to Sales/Performance. In the letter they wrote,

Based on the overall group sales as at year end 2008, there was a drastic drop in our sales and as a whole did not meet nor achieve the sales target. In view of this and the current economy downturn, the Management has decided to conduct the pay cut of 10% to your basic salary.

They only chose certain departments to implement this like product support and marketing. In fact on my side, my company did earn profit and the turnover were more than previous year. If we do not sign the letter and they continue to cut our pay, what can we do about it?

Mon, 06 Apr 2009 03:18:22 PM

before we further discuss about that issue and no one sign. Today the company decided to reduce 2days of working days a month only on certain people. Can they implement something without our consent?

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