Reduction of basic pay to half without prior notice

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Can a pvt ltd company reduce employee basic pay to half after six months of working without informing the employees? This has basically been done to reduce employer's contribution to provident fund. But due to slashing of basic pay the salary structure has been modified to that mentioned in the contract entered while joining the company. No fresh structure has been issued against the new salary structure niether the employees recieved any prior intimation. I wish to know this that whether company can legally do such a thing? and if my salary structure has changed without any prior notice does that make my contract null and void? 

Replies (6)

The clause of any such salary structure would have been mentioned in appointment letter.

Secondly, during probation period, such thing are likely to happen.

Due to new salary structure, old becomes invalid, but query can be raised..

but can it be changed without giving prior notice. My current contract is still prevalent but my salary structure got diverted from the contract. On one fine day i see my salary statement and find out my basic is slashed down by 50% on raising a query the employer says this has been done to bring the employees salary at a common standard. It completely makes no sense, I could clearly figure out that after introduction of PF they did such a thing so that they can reduce the employers contribution which is 12% of basic pay. All i wish to know is I have not recieved any notification from company for the salary change. As my current salary structure deviates from my contract does the contract stand void as on date?
also sir the old clauses has not been amended

First check any clause about your appointment as temporary/probation....

Secondly any terms about rights to change contract with employee......

Thirdly, if the sum total of the amount received are same, no need to take paid. Because practically you will not gain much, but mental tension and may be termination letter at end.

Unless new contract is signed/replaced, old contract remains valid but subject to any such amendments.

sir I want them to terminate my contract I have also submitted my resignation but they did not accept and want to retain my services. The clauses of the current contract deviates. the salary structure has been modified without any intimation to the employees. This is done after introduction of PF. The basic pay has been reduced to half in order to reduce employer's contribution to PF. however the same changes have not been amended in the contracts. So as per my contract my basic is one and am recieving another. I was not in probation period, I recieved confirmation long time back. I feel the clauses are being deviated in this case which raises a question over the validity of contract. I feel the clauses needed to be re-instated which has been not. Please provide your valuable suggestions on the matter

It is easy for you, if you want to terminate the contract........ because of non-performance of terms by Employer........You may send reminder for your resignation with the reason of changes in payment terms, than what contracted.......

But before taking any final decision, go through your contracted terms thoroughly for any uncalcualted loss and take call.

In case of any dount, better to refer any local lawyer........


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