The Evening Standard, edited by the former chancellor George Osborne, has imposed a 20% pay cut on some staff and furloughed others in a move that may breach UK employment law.
The London newspaper, which has reported losses of £23m over the past two years and relies on advertising for more than 80% of its revenues, announced the moves to staff on Wednesday in response to a dramatic shift in the ad market.
Employment lawyers said companies cannot unilaterally impose pay cuts or furlough staff without consultation. It is understood that Standard staff were not aware of the changes before the announcement.
The paper also said it was halting publication of its weekly magazine ES. Osborne said the publisher had taken these “hard decisions so we can keep our people in jobs and go on bringing the paper to you during this crisis”.
The newspaper said it had implemented “immediate measures” but did not directly comment on how it had consulted staff.
It is unclear what proportion of staff have been furloughed or had their pay cut. The salary reduction is thought to apply to all working employees earning more than about £40,000.
Matt Gingell, a freelance employment lawyer, said: “Generally, employers cannot impose pay cuts on the workforce and have to get their consent. If an employer imposes a salary cut without the employee’s agreement, the employee may continue working but make it clear that they are working under protest.
“Alternatively, the employee might resign on the basis that the employer has fundamentally breached their contract of employment. Depending on the circumstances, various claims could be considered.”
Philip Landau, an employment lawyer at Landau Law, said: “In some cases there may be a general variation of contract clause [in an employee’s contract] and a company could say ‘we can vary your contract at any time as you’ve given your consent’. The question is: can employers rely on this in court? Employers should exercise caution as it could still be considered unreasonable conduct by the courts.”
Some of the UK’s best-known companies have begun agreeing pay cuts with their top managers as financial pressures arising from the coronavirus pandemic begin to hit boardrooms.
Taylor Wimpey said on Wednesday that annual bonuses for bosses would be scrapped this year and the board had agreed to take a 30% pay cut for the duration of the lockdown, after the company closed all of its construction sites.
The firm has cancelled a 2% annual salary increase for executive directors that was scheduled to come into force on 1 April.
The English wine, beer and cider producer Chapel Down said its board, executive and senior managers had taken 20-40% salary cuts after the firm was hit by the closure of pubs and bars as well as its own brewery, shops, restaurant and bar.
On Tuesday the Sports Direct owner Frasers Group said its senior management team had taken “voluntary pay reductions” to a maximum salary of £40,000.
Both Frasers Group and Taylor Wimpey said the pay reductions had been agreed with those affected. Chapel Down did not return phone calls.
