A fundamental item within the human resources context is the employment contract. According to legal firm Johnson Stokes & Master, most disputes and cases handled in the past three years were related to reductions in employee benefits.
The company advises local and international corporations on employment issues, including legal obligations of employers and employees, termination issues, industrial disputes, retirement schemes, mandatory provident funds and employee share option schemes.
'Historically, salaries were being reviewed annually accompanied with a raise. This has been reversed as a result of the sluggish economy. Most employers found their employees were being over-compensated, and looked for ways to cut salaries,' said Duncan Abate, a partner at the law firm.
Besides salary cuts, reductions in other benefits such as the 13th-month bonus have also been widely considered and adopted. In this respect, corporations have been seeking professional advice in executing these cuts legally.
'Any salary cut is a breach of contract. Employers intending to reduce salaries have to obtain the employees' consent. In this employer-driven market, there are only two options for the employees: take the cut and stay with the job, or simply leave,' Mr Abate said.
Moreover, employers are looking for more flexibility in employment contracts, such as relating remuneration to productivity.
