New Case Law: Can Employees Consent to Worse Employment Conditions through Conduct?

In light of the COVID-19 crisis, many employers have been forced to reduce employees’ salaries. Such reductions, when not made through agreements or in an orderly fashion, may be fertile ground for claims regarding material worsening of work conditions, effective termination proceedings, and creating a stress-filled work environment. A new National Labor Court decision holds that, under certain circumstances, an employee’s conduct may constitute legitimate consent to a change in employment conditions and a reduction of salary.

The case in question involves a suit filed by a college professor for payment of the difference after a salary reduction. In a claim submitted to the Labor Court, the professor argued he had not consented to the salary reduction. The employer, however, maintained that the professor consented via his conduct to the change in employment conditions, including the salary reduction. Ultimately, the National Labor Court ruled as follows:

• An employer giving advance notice on a salary reduction, and the employee’s respective consent, is a necessary condition for the legality of the reduction.

• An employee’s consent to the salary reduction must be examined in the entirety of the circumstances, including the employee’s conduct and the necessity of the reduction. Indications of this include, for example, the existence of a real economic and objective need for the salary reduction and its widespread execution.

• The employee in this case recognized the need for salary reductions in real time, and his consent for these measures was demonstrated by his conduct.

• The employee was a lawyer, who, while not giving explicit consent to the reduction, did not express a clear and unequivocal objection. The employee sat on his rights for three years, continuing to perform his work without change, even after the reduction in salary.

• The employee objected only vaguely to the salary reduction, writing ambiguous letters to the employer without expressing a clear position. The employee may not avail himself of such conduct and have it viewed in retrospect as an objection to the salary reduction.

Naturally, not all salary reduction processes are the same, and employees rarely wait a long time to raise claims about salary reductions. Thus, we recommend employers examine each salary reduction process independently, carefully plan reduction processes, and be prepared for any possible responses.

As always, we are at your service for this issue.