Demotion, the counterpart of promotion, involves employees taking a step back in work and pay in order to maintain employment or create new jobs for young people. But should you just accept a salary cut?
Should one legally accept a salary cut?
What if the boss asks to hand in part of the wages or salary, collectively or otherwise, to safeguard employment for the company. Not an unimaginable scenario in 2013. Employment law lawyers have recently received more and more questions from employers who are investigating the options for requesting such a wage sacrifice from their staff. Legally this is very difficult because you cannot force employees to simply accept a reduction in salary. In practice, terminating an employment contract encounters less resistance than breaking it open for a lower salary or a lower position.
There is no legal obligation, but the moral pressure is often very high
It is mainly employers from small and medium-sized enterprises who are considering asking their employees for a wage sacrifice in times of crisis. And it goes without saying that, especially in companies of limited size, the moral pressure to agree to such a wage sacrifice is particularly high. It is often very difficult to say no in a small company with about ten colleagues when the boss plays hardball: everyone hands in money or the business goes bankrupt. Because anyone who does not participate is quickly labeled as a spoilsport and henceforth ignored by other colleagues, especially if that refusal results in dismissals among colleagues.
Solidarity is expected especially from the elderly
Naturally, it is extremely painful for an older employee if he is offered a position with less prestige and less salary. But according to employment law experts, it can actually be very effective in practice if older employees in particular settle for a lower salary. In this way, redundancies can be avoided and the way can be cleared for more young people. It is no secret that work productivity and motivation among employees often decrease as age increases. It could be a solution for those employees to work less or accept a lower-paid position. Applying such wage sacrifices on a larger scale could perhaps revive the hopelessly stagnant labor market. And we all benefit from this new solidarity.
Lower pay among elderly people abroad is not uncommon
According to proponents of demotion, we in the Netherlands must get rid of the idea that it is self-evident that we will earn more as we get older. In countries such as Sweden, for example, this change in thinking has already been made. There, employees are at their peak between the ages of 30 and 50. Not illogical, of course, because that is also the phase of life that demands the most from us financially: children studying, the house that needs to be paid off, etc. The Swedes clearly have less difficulty taking a step back after the age of 50. But it is doubtful whether we have already reached this point in the Netherlands.
Discussion about handing in salary is not new
As early as 1996, the CPB pointed out that the remuneration of elderly people was often disproportionate to their performance. And more recently, in 2012, the VVD scientific bureau also urged breaking the Dutch taboo on demotion. But every time employees have been asked to make a significant and massive wage sacrifice, unions have so far screamed bloody murder. Logically, because when it comes to its own wallet, the Netherlands likes to defend itself. Yet more and more voices are calling for demotion to be discussed in our country.
Demotion is increasingly discussed
It could easily become the buzzword of 2013, demotion . Many companies are suffering from the economic malaise. Laying off staff is possible, but this is seen as an ultimate and unpopular measure. Asking for wage sacrifices from employees is of course also painful, but it safeguards employment in a more acceptable way. Research shows that (older) employees are often quite willing to give up their salary, provided that sacrifices are also required from highly paid managers. This helps the company and also secures their job and that of younger colleagues. But love should never come from one side. And of course, an employer must also be able to offer sufficient guarantees that a wage sacrifice demonstrably secures the future of employees.