Salary reduction

Agreement of the employee

The employment contract is not immutable and must be adaptable to the changing requirements and needs of the economy and the company. The employer may not unilaterally change an employee's contract of employment in any essential respect, such as salary, working hours or place of work. As with the conclusion of the employment contract, any change requires the agreement of both the employer and the employee.


If the employer wishes to modify the employment contract to the detriment of the employee, he must follow the procedure of a modification-leave, which is subject to strict conditions of validity. The operation is twofold: the termination of the employment relationship is coupled with a proposal for a modified contract. The employer must mention precisely the proposed modifications and the consequences in case of refusal. The employer must indicate a deadline for the employee to accept.

The employee then has the choice to accept the proposal and continue the employment relationship under the new conditions or to refuse and terminate the contract. If the employee refuses, the employment relationship will end at the end of the legal or contractual notice period without the need for a new notice of termination.

Entry into force of the changes

The reduction in salary may not take effect before the end of the applicable notice period, otherwise it will be considered as wrongful termination. Particular care must be taken if the employee is temporarily protected from dismissal during a period of pregnancy, military service, illness or accident.


In the mind of the employer, a bonus is always a discretionary gift that he can freely decide to grant or not. This is not always the case! If the bonus is promised in principle and can be objectively determined, it is an element of the employee's salary. This may also be the case if the bonus is very high in relation to the employee's fixed salary or if the employer pays the bonus over many years.

In such cases, the bonus is reclassified as salary. The employer cannot decide to reduce or cancel the bonus without the employee's consent. It will have to go through the mechanism of modification-leave.

Mass redundancy

When the employer is forced to restructure his company, he may have to reduce the salary of many employees. In such a situation, the employer risks being in a situation of mass redundancy and having to proceed to a procedure of consultation of the personnel beforehand.

Equal treatment

Because of the equal treatment provided for by the Agreement on the Free Movement of Persons, the employer may not reduce the salary of his company's cross-border employees only. Such a measure is illegal.

Wrongful termination

Sometimes an employer proposes a change of contract, refuses to accept it and then terminates the contract. Such a dismissal may be considered as a reprisal leave. It will then be wrongful. 

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1 Mar, 2010 byMarianne Favre Moreillon