Be careful you don’t get screwed…But let’s not over-react to the Minimum Wage reduction.
There’s been a lot of commentary about the minimum wage over the last week ever since the announcement that the minimum wage is to be reduced as part of the four year plan.
People are suggesting that this is a budgetary measure and that those on existing minimum wage terms can’t afford to take a further reduction. So let’s examine what this cut means and get some of the facts straight before we over-react to this change.
The minimum wage currently stands at €8.65 per hour. We’re continually told that this is the second highest in the Euro zone although there is some disagreement about this when the cost of living is taken into account.
As a former small business owner myself I can appreciate the difficulties the minimum wage causes for small business and can appreciate why IBEC and others have called for this reduction.
But before we go off half-cocked, what does this reduction mean? Or maybe more precisely, what does it not mean?
For a start, it does not mean that your employer can unilaterally reduce your wage from an existing level of €8.65 to a new level of €7.65. If you are currently employed on the minimum wage you have a legally enforceable agreement with your employer that you will be paid at least this. This is the case even if this is not set out in a contract, you have the irrefutable right to be paid this rate.
Now like any legal agreement, this cannot be altered by one side without the consent of the other. Thus your employer cannot unilaterally (ie. without your agreement) decide to change your pay. To do so would be in breach of your terms of employment and you could pursue him for breach of contract.
What’s more you could in fact consider yourself to be constructively dismissed and pursue your employer for unfair dismissal but this is certainly not a route I would advocate.
In fact, the reduction to the minimum wage should only effect new employees entering the labour market or moving jobs. It becomes an issue of supply and demand then as to whether someone wants to work for the lesser sum. And in fact if it is the case that people are happy to work for this lesser sum it may be good for the economy and employment.
Many employers are not keen or even able to take someone on on the existing minimum wage and this change may encourage them to create employment in a more affordable way. The minimum wage has long been considered by small business owners as one of the things that made us uncompetitive.
So in a nutshell, the reduction can’t effect you if you are in employment unless you agree to a request from your employer to reduce your wage and then he can only reduce it with your consent.
To find out more about your legal rights in employment, please contact [email protected] or log on to our website at www.employment-matters.ie.