shraddha Shukla (Practicing Company secretary " Corporate Law Consultant") 27 September 2011
Can an employment contract be subsequently changed by the employer, unilaterally, to the disadvantage of the employee, like reducing his salary or perks etc.?
Also if company does so then does it need to take acceptance of employee? if yes then when we give increment to employee then why dont we take his consent?
Legal Maximus ( IP & Back office legal support and documents) 27 September 2011
Dear Shraddha,
Reducing his salary or perks etc are considered as change/deviation under the service condition which was accepted earlier by the employer at the time of emloyment, hence the same needs the consent or notice before change. Providing Increment is already a part of the service condition mentioned in the terme of employment. Hence there is no need to provide notice.
Kumar Doab (FIN) 27 September 2011
If the employer supplies a notice for reducing salary/perks, employee should gently decline to accept.
If the employment contract mentions CTC (Cost to Company) and some of the perks need to be altered due to some change in Govt. regulations, employee should study the impact and discuss it so as his package is not adversely affected. Good employers shall not resort to unfair practices and they send a prior communication explaining the regulations and alterations and options to the employee.
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