KEY POINTS:
It's rare in New Zealand for employees to suffer a pay cut, even for misbehaviour or terrible performance. Unless they are dismissed, the most severe financial sanction is usually no pay rise, or no bonus.
It would seem that this benevolence does not extend to the rest of
the world, however. In Japan, a sumo wrestler recently attacked a "junior grappler" with a ladle, leaving him bleeding and needing eight stitches. And not so long ago, one of his colleagues beat a junior wrestler with a bamboo sword.
This resulted in them both receiving the rather lenient punishment of a 30% pay cut for three months.
This sort of behaviour would not be tolerated in many workplaces, here or in other countries. Beating an employee, with or without a weapon, is more likely to land you in Paremoremo than get you a pay cut for three months, and rightly so.
Violence does however exist in the workplace, although in most industries it is less common than some other areas of life, such as domestic violence. A more insidious and widespread form of ill-treatment is workplace bullying, awareness of which is now much increased.
In New Zealand, pay cuts are also rare. Occasionally they follow on from a redundancy process, where an employee takes a job in another part of the organisation, and at a lower level, in order to remain employed. In a disciplinary context, it may in theory be possible to impose suspension without pay as a sanction, but without a contractual term allowing this, it is simply not a runner.
It is also not the done thing for employers to impose pay cuts for poor performance, at least on salaried staff (as opposed to people earning commission, where poor performance automatically results in less pay). In theory it is possible to cut pay if someone is not performing well, provided there is a term in the contract. For instance, if someone is taken on in the middle of the pay band for a particular job, their actual pay might go up or down to reflect performance, even below their starting level.
I should say that I'm not actually suggesting employers do this - it could be open to abuse and would need to be carefully monitored. However, is it better to face disciplinary action or even lose your job for poor performance, or take a pay cut? Of course both could happen, although if a pay cut is the first sanction, most employees are going to look elsewhere, and will at least have more time to do so. And in a tight labour market, employers would be unwise to use it except in the worst cases.
Greg Cain
Greg Cain is an employment lawyer at Minter Ellison Rudd Watts.
Photo / Kenny Rodger
