Refusing a Wage Cut Deemed Unreasonable Grounds for Redundancy

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4/12/2011 10:04 AM

The Civil Chamber of the Supreme Court found in a case involving a Kuressaare nursery school teacher who had been made redundant that if the work load is not reduced or the work of the institution reorganized, then reducing the wages is illegal and refusing to take the cut does not provide grounds for redundancy.

The long-winded court action arose from an incident in March 2009, when the employer started pressuring the nursery school employees to agree to amending the employment contract in such a way that their wages would be reduced, but the work load would remain the same. Soon after, the head of the institution announced the implementation of an 18 percent retroactive pay cut beginning April 2009, wrote

The notice of dismissal said that based on a ruling made by the Kuressaare City Council, the salary fund of the municipal institutions had been reduced by 18 percent, which made it impossible to uphold the employment contract under the same wage conditions. The employee, who disagreed with this proposal, was made redundant and began a long court battle.

The court of first instance found for the employer, but the district court took the opposite view, finding that the employer had no need to lay off the plaintiff and ruling that the employment contract in question was still in effect.

"The refusal of an employee to agree to amending the terms of an employment contract (including the wage conditions) cannot be viewed as a redundancy situation that provides grounds for terminating the contract. Amending the terms of a contract of employment in any way does not mean that employment has been terminated under the terms contained in it," noted the Civil Chamber of the Supreme Court.


Sigrid Maasen

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