The owner of Auto Windscreens has imposed 20% pay cuts on staff who have not agreed to them – and allegedly pressured other employees into consenting – as it attempts to slash costs to survive the Covid-19 pandemic.
The moves by Markerstudy Group, which employs around 3,000 staff, raise questions as to whether the company has followed UK employment rules by cutting pay for around 3% of staff who refused to agree to the deductions.
The group provides insurance services as well as owning the windscreen repair and replacement firm, which is perhaps best known as the sponsor of English football’s League One and League Two cup competition for five years until 2000.
Having furloughed around 900 staff in March, the company asked its remaining employees on 9 April to take a temporary wage cut, backdated to 1 April, and give up sick pay.
In a question and answer document sent to staff about the proposals, Markerstudy suggested that redundancies would be possible if the wage cut was not accepted, and added: “If anyone refuses [to accept the pay cut], it will be dealt with on an individual basis”.
Some staff have told the Guardian they received calls from managers telling them to sign the document or they would be made redundant.
At the end of last month Markerstudy told employees that 97% of them had accepted the proposals, although it is understood that some staff say they only signed under duress and some have begun grievance processes.
Pay has been docked from all employees dating back to 1 April.
Philip Landau, an employment lawyer at Landau Law, said: “The suggestion for staff to take a pay cut in these extraordinary times is not uncommon. The legal position is that an employer is generally not entitled to unilaterally impose on an employee a pay cut or reduced hours without consent of the staff.
“Such consent may be given at the time of request, or employers may have already reserved the right to vary the pay and hours in the contract of employment. However, any such variation, even if reserved in the contract, would still need to be reasonable and for solid business reasons.”
Landau added that if a company was “in genuine serious financial difficulty” courts would likely consider it reasonable to rely on existing clauses in employment contracts to vary terms.
A spokeswoman for Markerstudy said: “In order to try and preserve as many jobs as possible, [the company] took the difficult decision to ask staff to agree to a variation to some of their terms and conditions. The group received overwhelming support from almost 98% of staff who have appreciated the need for this in order to attempt to secure the group’s continued viability.
“Markerstudy has worked with staff to try and minimise, insofar as possible, the significant impact of the coronavirus pandemic on every area of their business. It is not appropriate to comment on individual situations or circumstances. [The company is] not aware of any threats being made to staff, and take such allegations seriously.”
The company did not answer a question about whether it had breached employment law during the pay cut process.
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