Salary Downgrade

Good day!

I am now working in this company for 1 year and 4 months. I was offered a pretty good salary when I was hired. I signed a contract for 3 months under an agency. After the probationary period of three months, I was expecting to sign another contract for my extension but there was none. I didn't mind, just as long as I am still receiving my salary every payday.

The company then decided to lower down the rate of their employees with the same position as mine. I consider myself lucky since I am now the only one who has the same salary, maybe because I'm in a very important assignment now. Many of my colleagues have resigned already since they did not accept the offer. My fear is, any moment the HR can call me and offer the same, and there's nothing left for me to do but to submit my resignation. Who would accept a salary that's only 33% of your original pay?! Much lower than what I had on my first job 4 years ago?

Is it legal? Salary downgrading?
Many thanks!

i would argue that you are already a regular employee of the company because you have been there for more than one year. you salary cannot be downgraded because it would be a diminution of benefit. you cannot be terminate without just or authorized cause.

The company now changes its agency, so we have to file our resignation in order to be transferred to their new one. Just this week, the HR person asked me to sign the contract under the new agency, with lower basic pay but with allowances, making it equal to my current salary. I know it forfeited my employment status, based on your answer above. They can now also cancel my allowances anytime, right? So I am indeed downgraded.

Thank you for the quick response. At least I can tell this to my co-workers subject to downgrading. More power!

Under the law you are already a regular employee since you have already been working for 1 year. Thus you have all the rights and privileges of a regular employee..one of which is the prevailing wage rate...

just as what was previously mentioned..an unlawful diminution of salary/wage and of rank in the company is tantamount to dismissal from employment, which is legally called constructive dismissal.

having the agency changes this. It appears that the company is engaged in some form of Labor Only Contracting, but supervises you directly although you are on record an employee of an agency.

ultimately, it is up to you whether you will accept the offer, but if you will contest, the remedy is to file a case at the nlrc.