Overview: reduced hours or pay

If there is a downturn in business or there is less work for you to do, your employer may ask you to take a pay cut or to work fewer hours. If your employer tells you he or she is unable to continue employing you under the current terms of your contract you need to consider this request very carefully.

Reduction of working hours or pay

If your employer asks you to work fewer hours or take a pay cut, this is a change in the terms and conditions of your contract of employment. Any change to your contract of employment must be agreed by both you and your employer. You may agree to the reduction. If you do not agree your employer may have no option but to make you redundant because, for example there is not enough work for you.

On 1 February 2011 the national minimum wage of €7.65 per hour came into effect. In some cases your employment contract or terms of employment will say that you are paid at the “prevailing National Minimum Wage hourly rate”. Where this is the case, an employer may reduce your pay in line with the minimum wage rates. In other cases there may be a provision in the contract that provides for a reduction in pay.

Where this is not the case, and you are on the previous minimum rate of €8.65 per hour, your employer cannot reduce it without your agreement, as this would change the terms of your contract of employment.

Lay off or short-time working

Instead of reducing your working hours or pay your employer may lay you off or put you on short time for a number of weeks. A lay-off situation arises where your employer is unable to provide work for you. A short-time situation arises where, due to a reduction in the amount of work to be done, your pay or hours are less than half the normal weekly amount. In both cases these must be temporary situations and your employer must notify you before they start.

If a lay-off or a short-time situation has continued for 4 weeks or more, or for 6 weeks in the last 13 weeks, you may claim redundancy. If you do not wish to claim redundancy but the lay-off or short-time situation continues, the question arises as to whether it is a temporary situation. If there is a dispute about this it should be referred to the Employment Appeals Tribunal to make a decision.

Social welfare payments for reduced hours or pay

If you are laid off or if you are on short-time working or reduced working hours so that you are unemployed for at least 3 out of 6 consecutive days you may be entitled to Jobseeker's Benefit or Jobseeker's Allowance. It may be possible to get Family Income Supplement if you have a family and your pay or hours are reduced.