Salary Cuts

Sample Cases


Continued refusal to accept salary cut leads to settlement of approximately 1 million yen

Case of Client T

Client T is a male in his 60s who lives with his wife, and was working at a small factory with about 10 employees for many years.
One day, his company unilaterally declared a 50,000 yen salary cut.
Client T voiced his opposition, but the company ignored him and cut his salary.
After this, Client T requested for the company to restore his original salary, but the company refused, and two years later, Client T left the company of his own accord.

Labor tribunal leads to settlement of approximately 1 million yen

We sent certified mail to the company to request for the company to pay the two years of cut salary.
The company did not hire an attorney and there was no constructive progress in negotiations. The company responded simply by saying that reemployment and salary were previously agreed upon.
We had no choice but to file for a labor tribunal, which led to a settlement of approximately 1 million yen.

Key Points

The reasons for Client T’s victory were twofold: (1) He did not sign an agreement on the salary cut and (2) he continued to voice his opposition to the salary cut.
In principle, a company cannot unilaterally cut salary without the agreement of the employee, which is required except to prevent company bankruptcy or other special circumstances.
The company stated that by continuing to receive the cut salary for two years, Client T had implicitly agreed to the cut, but the judge considered it important that Client T had refused to sign an agreement and continued to voice his opposition, and therefore decided that there was no agreement.
As seen in this example, it is important to clearly state one's opposition and never sign anything related to unilateral salary cuts.

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