I work for a young Japanese company. Until now the company was paying a fixed salary to employees (Base + Predetermined Overtime salary). However, they decided to move to a bonus system without holding any consultation with the employees.
The new bonus system does not pay additional amount on top of the existing salary but instead takes a portion out of the existing salary, to be then later paid as a bonus (which will be variable, so can be lower or higher than the portion taken from the original base salary).
I was wondering if they can legally do it?
Furthermore, how about in the scenario, when the employee exclusively negotiated for no-bonus based compensation system?
15 comments
Interesting, not sure. In general my feeling is that if they change it for everyone there is not that much you can do. You can fight it for sure, but then again do you want to be the only one going against corporate?
If it helps, this sounds like the typical deferred payment “bonus” and not a performance based bonus system.
They can’t change the conditions of your contract without your consent.
On the other hand, if you’re the only one, you’ll be the troublemaker. I’d try to get more than a few co-workers onboard not to accept the change in conditions.
AFAIK only base salary is the part they can’t touch without a contract renegotiation. Allowances don’t require the same degree of scrutiny which bonuses and minashi zangyo (predetermined overtime) may fall into. If they are effectively converting predetermined overtime into an annual or semiannual bonus system, that may not be illegal enough to fight over.
I’m sure you can fight it on some level but you can expect your base salary to never go up again as well as not receiving extra bonuses etc.
“General Union”
My company did the same shit like 2 years ago. They’re not allowed to reduce your base pay, but in the case of my company any increases that would have gone into your base are instead applied to the bonus, until the bonus reaches some arbitrary % of the base. So if I was making 5M, if I were supposed to have gone up to 6M it would instead be 5M + 1M bonus.
It sucks but there’s probably nothing you can do about it assuming it applies to all employees.
They tried to pull that on me some years ago. I told them to fuck off, and we never talked about this again.
Basically, reducing your salary and giving you the difference in bonus is good for their balance sheet because bonuses are not fixed expenses, but they cannot change your contract without your consent.
If they insist, tell them that you would be happy to review your contract but that they should come up with an arrangement that is favourable for both parties.
That’s messed up.
My company implemented bonuses recently but they increased the base pay AND added 2x bonus twice a year.
That’s the way to make employees love their company.
Needless to say, no one argued with that lol
Speak to a union and unionize
Sounds sketchy as fuck if they are taking money out of your salary. I would consult the labor board.
Read your labor contract. They can’t change your contract without your consent. Even if your contract is vague enough to allow it, you may have a case.
I’ll give you a real answer unlike all the keyboard warriors here. Yes, they can and they will. Is it ethical or even legal? No clue but probably not.
You have 2 options. Accept it and live with it which is going to be a net loss for you unless you negotiate a raise to compensate yourself. Other option is that you accept it and start looking for a new job while still keeping your relationship with your current employer good for future reference.
I have a friend who works at a company with that same payment system and he whined about it until he saw his payslip last month which included his bonus for 2022.
Needless to say, dinner’s on him next time we meet.
They cannot change your contract without you signing a new contract. Notify the labor bureau and try to get a few co-workers to go with you. Take your contract and the new payment conditions and say you don’t agree with it. If you go with others, your case will be escalated and your company will be in deep shit.