wages reduced

legal concept

• salary= all monetary or in kind economic perceptions received by employees as compensation for professional labour

  • including legally traded working time ie paid leaves and holidays

• requirements

  • must arise from a lawful employment relationship (contract or cba)

  • must be linked to effective working time (or legally equivalent)

  • must be paid by the employer in exchange for labour (monthly usually)

• when no lawful contract exist=no salary=no labour rights

  • voluntary/undeclared black work/illegal work results in no min wage, no claim for unpaid wages and no dismissal/leave protection

structure of salary

• must produce personal economic enrichment of employee=not reimbursement of costs

• base salary= core part paying for work according to category and job position

  • must respect minimum wage set by gov annually

  • can be improved by cba or contract but not lower

• wage supplement= exist only if regulated in the contract/cba

  • personal supplements=awards personal qualities

    • seniority, languages, qualifications

  • working conditions supplement= awards real circumstances of work

    • night work, toxicity,danger,hardship,oncall,remote location 

  • company result supplements= awards output

    • bonuses,commisions,productivity,profit sharing

• salary in kind=non monetary benefits providing personal economic advantage employee would otherwise pay for

  • limit to 30% of total salary

  • subject to Social security and IRPF tax

  • private use of company vehicle vs vehicle used for commuting (work tool)

  • private health/life/accident insurance

  • housing, stock,food vouchers

  • clothes if not a required uniform only

non salary items= indemnities

=do not remunerate work but compensate expenses or damages

• tax + ss exempt if justified and within legal limits

• lump sums or exceeding real employee cost=becomes salary as not work related

  • travel/commuting allowances/mile reimbursement

  • repair/replacement of work related damage (tools)

  • company car for commuting

  • uniform/safety equipment

  • employer interest items (training, medical checks, compulsory equipment)

  • mobility/relocation allowance (displacement, family reunion, relocation cost)

  • termination indemnities= always compensational so exempt from ss ( redundancy,dismissal, end of temp contract)

salary when work cannot be performed

• employers fault= salary must be paid

  • lack of materials

  • employer caused closure

  • machine breakdown due to poor maintenance,

  • refusal to provide tools

• force majeure= salary not owed

  • natural disasters+ lockdowns

  • exception= when contract/cba grants added protection

• employer insolvency= salary not owed

  • salary may be paid by fogasa within limits

fogasa=wage guarantee fund

• what=public fund guaranteeing wages and indemnities only when the employer cannot pay 

• when=

  • employer insolvency

  • termination/suspension due to force majeure (fire/flood) 

• covers= unpaid wages+ severance compensation

  • never covers 100%- strict cps on amounts and periods so excess is lost

• procedure=

  • worker sues employer and obtains judgement confirming debt

  • employer is unable to pay

  • worker claims from fogasa (not automatic primary payer)

  • payment within legal limits

compensation and absorption

• mechanisms to prevent double payment where wage increases overlap 

• only comparable salary concepts can be absorbed/compensated 

• cannot reduce pay below the smi or minimum contract/cba levels 

compensation= worker keeps advantage

• applies when existing contractual pay is more favourable than the cba minimum 

  • contract salary is 200£ above the cba minimum= keep 200£ advantage

  • 50 £ seniority supplement + new cba raise= both kept as they are different concepts (personal vs wage increase)

  • contract productivity bonus £200+ introduced cba minimum 150£= keep 200£ advantage

absorption= new increase offsets existing extra

• applies when both concepts are similar to avoid double pay

  • Worker earns €200 above CBA; CBA increases by €200= advantage absorbed no increase

  • CBA raises minimum to match worker’s pay= prior advtange absorbed no increase

  • individual night bonus of 80£; new cba night bonus of 80= advantage absorbed no increase

  • responsibility bonus of 100£; new cba 100£ bonus= advantage absorbed no increase

protection of wages from creditors

• unattachability= protects substance minimums

  • ensures worker retains enough to live; credits cannot take whole salary

• salary up to smi= 100% unattachable

• amount above smi is attachable but only by a percentage on a sliding scale

  • adjusted depending on family responsibilties= keep more if providing ie