Seven implements 20% pay cuts due to ‘extraordinary’ COVID-19 situation
Seven West Media is asking staff to take a pay cut as the company attempts to navigate the “extraordinary and challenging” environment presented by COVID-19 (coronavirus).
CEO and managing director James Warburton conceded to staff in an email today that despite its various job-saving initiatives “some job losses will be inevitable”.
Warburton has also asked staff to be patient and respectful during this difficult time
Those earning between $80,000 and $200,000 per annum (including superannuation) and not covered by enterprise agreements will be asked to work a four-day week with a commensurate 20% reduction in salary. Those earning above $200,000, however, will be asked to take the pay cut, but keep their hours the same.
Employees covered under an enterprise agreement will not be subjected to the reduction measures.
Those who have been asked to reduce their hours will be allowed to use accrued annual leave to cover the unpaid day each week. Once the annual leave is exhausted, however, the fifth day will be unpaid. Warburton noted in an all-staff email seen by Mumbrella that “no negative leave balances will be possible”.
“If you do not wish to top up your pay with annual leave, then you are not required to do anything further. Your next pay will be reduced by 20%,” Warburton explained.
He also requested staff take additional annual leave between now and 30 June, 2020 to help the company reduce costs.
The pay cuts, reduced hours and other measures are in effect between now and 30 June, 2020. Warburton noted this will be under constant review, and may need to be extended.
Warburton also called on staff to rally during this difficult time.
Seven’s year is not going to plan
“I’m sure you will appreciate that, while the situation is not ideal, we all need to work together over the next few months to ensure our business remains viable,” he said. “Your continued performance of work on or after 1 April, 2020, will signify your acceptance of the above arrangement. Please note the executive team will also be subject to the salary reductions and are required to continue to work at full capacity during this time.”
He also asked staff to be patient, respectful and considerate of each other when seeking details and clarity around the new arrangements.
UPDATE 2 April: Mumbrella contacted Seven and asked for clarification around staff who object to this arrangement, and their avenues for alternatives. Mumbrella also asked about staff implicitly signalling their agreement by their “continued performance of work” from yesterday, rather than explicitly agreeing. Seven responded with “No comment.
For further information on your rights and responsibilities when it comes to pay cuts, reduced hours and being stood down, please see Mumbrella’s explainer here.
Hhmmm,
Really? Struggling through a 20% pay cut ……..are they serious, when the rest of the country are being stood down on zeros salary or toally losing their jobs? Consider yourself lucky Seven West Media staffers.
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Honest question:
If someone accepts a pay cut in an effort to support a business in an effort to minimise job losses, and then that person is ultimately made redundant, is their redundancy package calculated based on the old or the new reduced salary?
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Hard pill to swallow, and I wish SWM staff all the very best through these times
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Is it legal to say “ïf you dont respond, your pay will automatically be docked 20%”
surely you need agreement – not a one-sided declaration.
It will be interesting to see the first legal test case on this.
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The pay cuts are generally temporary and not permanent alterations of the original contract. In most cases I would imagine you get full time equiv pay out
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IRMan,
If you have signed a revised agreement to accept less salary, then yes, your redundancy will be based on your current and existing agreement – so, take not of that prior to signing, (or sign it with an addtiion to the agreement – stating that if redundancy were to take place – the redundancy terms are based on your original agreement – then initial it with your employer).
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What do you reckon? Of course they’ll shaft their employees.
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Honest question – what happens to you if you don’t accept the 20% cut?
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This is a financial hit, they are allowed to have feelings about it. Despite other people being in worse positions.
I am sure they are grateful to still have their jobs.
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Hi Stephen,
I don’t know Seven’s exact arrangements, but we spoke to Danny King, leader of the team at employment law firm Danny King Legal, earlier this week.
In King’s view, “there is no such thing as a forced pay cut, or being forced to take leave”, beyond an existing right for a company to ask an employee to take annual leave if there is an “excessive accrual”.
“Even if, after the cut, the employee will earn more than the minimum applicable under the award or National Minimum Wage Order, to do so will almost certainly be an act of repudiation – which is a breach of contract,” King explained.
This means staff can “say in essence ‘No thanks, I’ll stick with what I’ve already got’, forcing the employer to stick with the original salary, or accept the repudiation bringing the contract to an end in breach of its terms”.
However, many employees will be willing to agree to measures like pay cuts or requests to take leave in an effort to preserve some level of job security.
……
You can read more here:
https://mumbrella.com.au/from-pay-cuts-to-job-losses-how-the-industry-can-and-should-respond-to-a-pandemic-623091
I hope this helps,
Vivienne – Mumbrella
I hope that the SWM executive are also doing substantial paycuts.
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I hope the young coordinators at the coal face who are getting pretty much an award wage are looked after. As the quote says: “without a solid foundation, you’ll have trouble creating anything of value”
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In other words, take the cut or you’re f***ed
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Hi Lyndall,
The Seven West Media execs are taking a 20% pay cut but maintaining their standard hours. This is outlined in the story.
I hope this helps clarify things.
Thanks,
Vivienne – Mumbrella
very unlikely that would stand the test of fair work. You have to consult with staff to get their actual consent.
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It’s interesting though isn’t it? Employee’s haven’t been asked to agree to these terms; they’ve been dictated them and told that they automatically agree.
Surely that isn’t how this works. Surely the company requires two party agreement, in writing, in order for these measures to hold.
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Yeah.. it has to be mutual agreement according to the Fair Work website.
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IMHO Media and retail senior execs have been scandalously overpaid in proportion to their production and results for some time. It does give 7 the opportunity to re-set the salary baseline.
Unfortunately, as @Roger’s comment, it will be the coordinators and juniors at the bottom of the tree who will cop it (yes I know it says $80-200k take a 20% pay cut). The only real choice those guys have is to work to rule, and not respond at all on day 5 of their working week…but i doubt that will happen.
One thing that isn’t clear – does this apply to on-air talent? I would imagine there’s some fat they could trim there…?
And remember ‘I get buckets’
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Hi ‘Confused’,
I agree, and we’ve actually just discussed this very point in this week’s podcast, which will be live on the site in a few hours. Our reporter Brittney Rigby (who is also a lawyer) noted that yes, there does need to be agreement, so it’s interesting that Seven have said you signal agreement by continuing to turn up to work (or working from home as the case may be). I’m not sure what the alternative is under that arrangement, refusing to “show up” to work, to signal your disagreement or dissent?
I’ll reach out to Seven for clarification, as it’s certainly a talking point.
I’ll update you if I learn anything new.
Thanks,
Viv – Mumbrella
I hope this also applies to the “talent costs” and maybe the shrewd legal team can find a reduction clause in those top of the market rights deals.
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Hi all,
To update you, I sent the following to Seven for clarification around this:
“We have a few people both in the comment thread and via other platforms asking us for clarity around the pay cuts/ reduced hours situation at Seven.
James’ email to staff indicated that staff signalled their agreement to the new arrangement by continuing to work from that day forward, and that they didn’t need to actually sign or send anything for it to take effect.
Our conversations with lawyers, however, in researching how the industry responds to times such as these, indicated that employees do need to actually signal their agreement, and not just be instructed. (We wrote a piece about it prior to Seven’s announcement: https://mumbrella.com.au/from-pay-cuts-to-job-losses-how-the-industry-can-and-should-respond-to-a-pandemic-623091 )
Can you please clarify if this is correct?
What avenues (if any) do Seven staff have if they do not want the reduced hours and pay cut? Do they have to agree?
We have a number of people asking, not necessarily to criticise Seven, but just out of curiosity and uncertainty as I imagine many other workers and organisations will be (or already are) facing similar circumstances.”
Seven has responded: “No comment from us on this.”
I will, however, update you should I learn anything new.
Thanks again for your interest and questions,
Viv – Mumbrella
Thanks for reaching out Vivienne, but we all know there is little chance in receiving a clear answer from this establishment.
On another note one would imagine it’s only a matter of time until those working under enterprise agreements are effected with some plan hatched via the back door using the cover of Covid-19.
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HI
One question,
The company is asking all salaried employee to agree to a cut and in the letter they are indicating for an undetermined amount of time. Is that legal? Should’t they establish some conditions under which the salary will be back to what it was?? I know this COVID-19 duration is uncertain but should one protect itself as well.
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Hi Vivienne,
Very much appreciate your response and all the additional info you’ve sourced
thanks
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Times are undoubtedly tough but when things go well, employers don’t exactly splash bonuses around.
So, instead of pay cuts, I propose that staff give SWM a loan, to be paid at a time when the business returns to profit, with reasonable interest added of course. This helps the SWM, the employee and ensures that everyone is invested into making sure the business returns to profit. The big assumption here is that SWM will at some time return to profit.
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