1. My employer has unilaterally reduced my salary what can I do?
There are a few ways employers appear to be reducing salaries – they are either reducing salaries and hours of work or just reducing salaries with the expectation that employees maintain their hours of work.
Reduction of salary is also allowable pursuant to the JobKeeper scheme. Further information about this is detailed below.
A. Reduction of your salary
Please note: This information applies if you are not partaking in the JobKeeper scheme.
Generally, an employer cannot change the terms of an employment contract without the employee’s agreement. If you do not agree to the reduction in your salary, then your employer will be in breach of the employment contract if it pays you less than your agreed salary or wages as set out in your employment contract.
Many employment contracts also provide that any variation to the terms of the contract can only be made by agreement of both parties with the variation to be in writing and signed by both parties.
If your employer reduces your salary without your consent, the following options are available to you:
Reduction by Agreement of Both Parties
- Consent / agree to the reduction of your salary
- Insist upon payment of your full salary
- Seek a redundancy
- Negotiate a different change.
It is open to you to agree to the reduction of your salary.
Should you choose this option, you can write to your employer confirming that you only agree to a temporary variation and that you will revert to the full salary from a particular date.
Any variation to the terms of your contract, including the timeframe for the reduced salary, should be in writing and should indicate whether by a signature or by an email confirming agreement, that both parties agree to the reduction and the timeframe.
Further agreement can be reached and evidenced in writing if necessary if the original period of the extension expires and the COVID-19 pandemic persists.
It is important to note that regardless of any agreement you may come to with your employer to reduce your salary, your employer cannot pay you less than the minimum rate under an award that covers your position (if you are award covered).
Insist upon full payment
You are not obliged to agree to the change proposed by your employer.
If you wish to insist upon full payment of your salary, you can inform your employer in writing that you do not consent to the reduction of your salary, and that by you continuing to work, this does not indicate your acceptance of the change. It is important that you clearly reject the proposed reduction in writing.
Legally, continuing to work and receive a reduced salary over a period of time can be interpreted as your acceptance of your employer’s offer to vary your employment contract by reducing your salary.
If you continue to work without expressing your disagreement, then your employer may argue that you accepted the change by your conduct.
If your employer is unable to pay your full salary, then it may be possible to claim that your position has been made redundant, and that you are entitled to a redundancy payment. An employee’s position is redundant when their employer no longer requires the position to be performed by anyone.
If your position (i.e. at the salary and hours in your employment contract), no longer exists because your employer is no longer able to pay your full salary, that situation may come under the definition of redundancy. You may want to first ascertain what, if any, entitlement you have to a redundancy payment under an enterprise agreement (if you’re covered by one), your employment contract or the Fair Work Act 2009 (Cth).
Any entitlement you may have to a redundancy payment will depend on several factors such as the size of your employer’s business and the number of years you have worked there for.
Negotiate a different change
You could negotiate to receive another benefit in exchange for your agreement to the temporary reduction of your salary. For example, you could reduce your hours of work, seek additional annual leave, or reduction to your workload. Any negotiated variation to your employment contract (including the time period over which the variation will apply), should be recorded in writing and be signed by both you and your employer.
If you find yourself in a situation like this, please get in touch with the Workplace Advice & Support team for individual advice by emailing:
B. JobKeeper scheme
The JobKeeper provisions were introduced temporarily into the Fair Work Act beginning 9 April 2020 and will continue until 28 September 2020.
If you are an eligible employee for the purposes of the JobKeeper scheme and you are receiving JobKeeper payments, then your employer may give you a “JobKeeper enabling stand down direction”.
A JobKeeper enabling stand down direction allows your employer to temporarily reduce your hours of work or days of work. This, in turn, can reduce your salary. However, the employer cannot reduce your hourly base rate of pay.
A qualifying employer may direct an eligible employee to:
- Not work on one (1) or more days that he or she would normally work;
- Work for a shorter period of time than the employee would usually work on a particular day (or days); and
- Work less hours overall than the employee ordinarily works.
For further information about the JobKeeper scheme, please see Professionals Australia’s factsheet available here:
For individual advice regarding the JobKeeper scheme, please contact the Workplace Advice & Support team via email: firstname.lastname@example.org
2. My employer has asked me to work from home. Should my employer pay for my set up and are there allowances my employer should provide me with?
Generally, employment contracts, modern awards and enterprise agreements contain clauses regarding reimbursement of reasonable work-related expenses.
For example, clause 16.3 of the Professional Employees Award provides the following:
“16.3 Equipment and special clothing
Except where an employee elects to provide equipment and special clothing, the employer will provide free of cost, all such equipment and special clothing reasonably required for the adequate discharge of duties. Such equipment or clothing will remain the property of the employer”.
You should note, however, that it is usual for expense-related clauses in industrial instruments to require that you obtain your employer’s permission before incurring the expense. In any case, it is good practice to create a list of items and their costs, that you will need in order to work from home, and then send this list to your employer for its approval, prior to purchasing the equipment. As always, keep receipts/documentation of anything you purchase.
Where the industrial instrument is silent on reimbursement or payment of work-related expenses, you should try to create an agreement (and record it in writing) with your employer.
You should also be aware that the Fair Work Act states that your employer cannot require you to spend or pay your employer or another person, from your money or wages, in relation to the performance of work, if:
The requirement is unreasonable in the circumstances; and
The payment is directly or indirectly for your employer’s benefit.
This applies to prospective employees as well.
Lastly, you may be able to claim tax deductions for some of your expenses while you work from home. Please visit the ATO’s ‘Working from Home
’ page for more information.
Whether an employee is entitled to reimbursement from their employer will depend on the circumstances of the case. If you have a query about this, please contact the Workplace Advice & Support team for advice on your particular situation.
3. General information (links)
Jobseeker payments and subsidies JobKeeper Payment:
Eligible employers impacted by the pandemic may be able to access a government wage subsidy to continue paying their employees. Eligible full time and part time employees, including stood down employees, may be eligible to claim $1,500 per fortnight from 31 March 2020, for a maximum of 6 months.
Individual Income Support:
The eligibility of certain income support payments has temporarily been expanded. There is also a temporary coronavirus supplement of $550 per fortnight.
You may be eligible to receive two separate payments of $750 if you are an eligible social security, veteran and other income support recipient or concession card holder.
Early Access to Superannuation:
You may be eligible to access up to $10,000 of your superannuation in 2019–20 and a further $10,000 in 2020–21.
Support for Retirees:
The Government is temporarily reducing superannuation minimum drawdown requirements and social security deeming rates.
Evictions will be put on hold over the next 6 months for commercial and residential tenancies in financial distress due to the impact of the pandemic.
Many financial institutions are offering their customers flexibility if they are unable to repay their home loans, including deferring home loan payments. Contact your financial institution for more information.
Mental Health Resources:
The DHHS has published some useful strategies to look after your mental health during the pandemic.
Check out the Information Sheets for seniors, parents and families, and for those in isolation.
Many employers also have free access to Employee Assistance Programs (EAP) for their employees. EAPs are a great initiative for employees needing support for their physical, social and psychological well-being. Contact your employer for more information.
If you suspect you may have coronavirus, call the dedicated hotline on 1800 675 398. It’s open 24 hours, 7 days a week.
If you are looking for alternate work during the pandemic, or if you would like general careers advice, please contact our Careers Team at email@example.com
This publication is considered general information only and is not intended to be relied upon as legal advice or as a substitute for legal advice. If you require advice on your specific situation, please contact the Workplace Advice & Support team at Professionals Australia on 1300 273 762 or at firstname.lastname@example.org
This publication is also not financial advice.
Please contact your accountant or financial adviser for financial advice specific to your circumstances.
4. I am supposed to start my new job soon, but my prospective employer has deferred my start date because of COVID-19 or is contemplating terminating my employment.
What are my rights?
If you have yet to sign the offer of employment, it is possible for the company to change the start date or withdraw the offer of employment.
If you have accepted the offer of employment, the starting point would be to check the terms of the contract. Most contracts will not permit an employer to unilaterally change the terms of a contract – for example, delay the commencement date – while some may contain a provision that allows for an employer to change the commencement date. If the contract does not allow for such a change, it may be found that the employer is in breach of the contract.
You will need to make the decision as to whether you accept the deferment of the commencement date or whether you want to enforce the original commencement date.
The ability to enforce the latter depends on several factors such as whether the employer actually has sufficient work for you to perform, or whether it has reduced its current workforce, etc.
In terms of terminating the employment, some contracts may permit the employer to withdraw the offer at any time prior to the commencement date. However, other contracts might require the provision of a notice period or a payment in lieu of notice in order to terminate the contract prior to commencement. Therefore, you may be able to seek payment of the notice period.
If you are faced with a situation like this, please get in touch with the Workplace Advice and Support team via email@example.com as soon as possible for individual advice on your situation.
5. I have heard that Modern Awards are being varied. How will this affect me?
Firstly, it is important to note that most members of Professionals Australia who are employed in the non-government sectors are on some form of common law contract. However, the terms and conditions in a contract cannot conflict with any award that covers your employment. For example, a common law contract cannot stipulate that your salary is below the minimum award rate.
The Fair Work Commission, as part of its response to the current COVID-19 pandemic, has varied a large number of modern awards, including the Professional Employees Award, Pharmacy Industry Award and the Architects Award, amongst others. These changes to modern awards are temporary.
Two variations have now come into effect:
1. Pandemic Leave
– Where an employee is required to self-isolate (because of a directive from a government or medical authority, or acting on the advice of a medical practitioner); or where measures are taken by government or medical authorities in response to the COVID-19 pandemic, that employee is entitled to 2 weeks of unpaid leave, if the person cannot work from home. This will be an alternative to having to take other forms of leave such as Annual Leave or and/or Long Service Leave which an employee may not wish to use.
2. Annual Leave at Half-Pay
– the second variation allows an employee, by agreement with their employer, to extend the period of Annual Leave by taking the leave at half-pay. Employees will not be forced to do this, but cannot unreasonably refuse a request from their employer to take annual leave at half pay.
If you have queries about the temporary changes to modern awards because of the COVID-19 pandemic, please contact the Workplace Advice & Support team.
Please note: This information is current as at 26 May 2020.
This publication is considered general information only and is not intended to be relied upon as legal advice or as a substitute for legal advice.
If you require advice on your specific situation, please contact the Workplace Advice & Support team at Professionals Australia on 1300 273 762 or at firstname.lastname@example.org.
This publication is also not financial advice. Please contact your accountant or financial adviser for financial advice specific to your circumstances.