Arbitrary cash cuts a danger zone
EMPLOYERS should check employee contracts and any undertakings made at the time of recruitment before arbitrarily making changes to cut costs — especially for senior executives with large bonus incentives.
This caution was sounded by Joydeep Hor, managing partner of Harmers Workplace Lawyers, at a human resources conference in Sydney this week.
‘‘ The days where companies slash or significantly adjust bonuses and incentives without consultation are numbered’’, said Hor, saying that unilateral actions could well be challenged in courts by disgruntled staff.
Promises and representations, formal and informal, could be applied in legal challenges in circumstances where employees believe they had been misled by employers into expecting certain levels of bonuses and incentive payments regardless of economic conditions, he warned.