Arbitrary salary reductions are not permitted under labor law
The good news first: no, you can’t. Arbitrary salary reductions are not permitted under labor law. An employer must therefore present good reasons if he wants to reduce the salary of individual or all employees. And just because a presentation went badly or an employee had a bad day, these are by no means reasons that would justify a pay cut.
In most cases, an employee is not paid for his successes, which bring the company forward, but for his work performance as defined in the contract. If he brings this, then a salary cut is not justified. There is only a difference if the payment in the employment contract is linked to the service provided. But often references to targets in the employment contract are related to bonuses and not to the actual salary.
Gross misconduct or permanent non-performance are problematic
However, anyone who permanently fails to provide the performance agreed in the employment contract may, in case of doubt, face a reduction in salary. Even in the case of “gross misconduct”, the boss is authorized to reduce the employee’s remuneration.
However, there must be gross violations here, which the employer must then also disclose to the works council. A salary reduction can only be fully implemented in coordination with this body.
Economic emergency: Cuts affect all employees
Incidentally, if the company’s sales are not quite as good as hoped and things are getting a little tight economically, employers are not allowed to take a salary cut. Wages can only be cut if they find themselves in a genuine emergency situation, which in turn must be proven.
However, such business-related salary cuts then affect not only individual employees, but all employees of the respective company. They must be announced in advance and at least adhere to collective agreements and minimum wages. Employees then often only have to consider whether they are waiting for the internal economic situation to improve or whether they are looking for another job.
Change termination only with reason for termination
By the way, there is another way in which the boss can reduce the salary. This is possible within the framework of a so-called notice of change. The current employment relationship is terminated and at the same time a new job offer is made with a lower salary.
But don’t worry, employers are not allowed to just arbitrarily announce a notice of change. Because here you need the general reasons that justify a termination. Simply reducing the salary is not possible. Salary increases are also much more pleasant for employees. Incidentally, those who appear self-confident and present their work for the company have a good chance of doing so.
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