Decrease the salary due to recession in market - what will be the legal procedure?

I am Advocate High Court from Karachi, Pakistan. I am dealing in Commercial and Labour Laws in Pakistan.

As per my legal view in this case, the principle of "locus poenitentiae" applies. This means, in short, once a right has been given, it cannot be taken back. You cannot reduce salary as it creates an accrued and vested right. However, you can resign, pay all dues, and then be re-hired with a negotiable salary. This would be possible according to my legal perspective.

Regards,

Asif Amin
Advocate High Court
Karachi, Pakistan
Email: asifaminpk@gmail.com

Dear sir,

In my opinion, you should not reduce the salary of the employees. Instead of reducing their salary, you can put it on hold for some time at a certain percentage until the company is in a profitable situation. If you reduce an employee's salary, it will impact their future employability, as every company determines new salaries based on the previous salary drawn.

In my view, if the company considers the employees' future, the employees will support the company during losses or challenging times. Please prioritize future growth.

Regarding legal matters, you can engage them on a contract or professional basis where compliance with minimum wage laws is not required.

Regards,
Nilesh Kadam

Hello,

No one is advocating reducing salary under normal circumstances. It is a desperate measure to save more jobs rather than save a few jobs. In such a situation, you need to consider the pros and cons for employees: more jobs at lower salaries or fewer jobs at higher salaries.

The sector is also important. Reducing salary in manufacturing doesn't result in much savings as a percentage of the salary since the overall cost is very low. The largest part of the cost is material cost.

Another point to note is that putting employees on contract does not absolve the employer from paying minimum wages. Minimum wages must be paid in all conditions.

Regards