The salary for software developers decreases
A lowering of the salary means that the wage is reduced and that there is a reduction in income for various reasons. Depending on the amount, it is only a small cut or a change to a completely different salary class. Even if there is no increase in salary for a long time despite inflation, the elimination of special allowances, an increase in working hours with the same financial conditions or compulsory course work, a salary can be reduced.
For entrepreneurs in particular, lowering their salaries can be an opportunity to lower their company's expenses for personnel costs and thus create financial freedom. Reasons for this can be, for example, collapsing profits, which are offset by lowering your salary. Especially in times of economic crises, this can be a corporate policy measure with which insolvency can be averted. Indirectly, lowering the salary in times of economic hardship can help to keep jobs. Of course, a company can also simply cut salaries and try to generate additional profits by doing so.
For employees, on the other hand, lowering their salaries always has a specific negative consequence, as they have noticeably less money in their pockets. Therefore, from the point of view of an employee, a reduction in salary is often a provocation and forces him to possibly terminate or change his lifestyle fundamentally and to limit himself financially.
In terms of collective bargaining law, a planned wage reduction can therefore often be a reason for labor disputes. Basically, of course, the current employment contract always applies and a reduction in salary requires a new employment contract. In any case, a salary reduction must first be offered and accepted by employees on a voluntary basis. If this agreement does not work, the employer must issue a notice of change. This is then a normal dismissal, which is immediately linked to an offer for a new employment contract with a lower salary. It must be justified in writing. This termination can either be contradicted immediately and sued against it or accepted with reservations in order to exhaust all legal possibilities against a lowering of the salary.
The Federal Labor Court has ruled that a wage reduction is only justified in a demonstrably inevitable existential emergency of the company and that all employees outside of the specifically threatened parts of the company must then be offered the same termination notice.
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