'My company cut my pay by £700 to cover NI rise - surely this isn't allowed?'

Billy asked: "My company has asked all its workers to take at least £700 a year off our salaries so they can afford the new rise in NIC the firm now has to pay - is this allowed to happen? Surely it has to be negotiated individually and can't just happen. All of our salaries are written in contracts!"

To answer, we spoke to Beverley Sunderland, founder and partner at Crossland Employment Solicitors.

Unless there is a very clear clause in your contract allowing your employer to reduce your pay for working the same hours - which is very unlikely - "then any reductions to your pay have to be agreed by you and cannot be unilaterally imposed by your employer", she says.

What questions should I ask?

• Why this salary cut is necessary - is it to keep the company afloat or is it because the increase in NI means the owners will be earning less profit?;
• Has other cost-cutting been considered? Employees should make suggestions if they think there are other ways of saving money;
• Are the bosses also taking a pay cut? They will be earning a lot more and so their increased cost to the company will be significantly higher;
• Is the reduction permanent? And is there an intention to reimburse the lost wages at some time in the future? There may be other ways for the employer to counter the additional costs - for instance, increasing prices - but which might not filter through for a while, and so the change might be temporary.

What if my employer just imposes the reduction?

If your employer reduces pay without your agreement, Sunderland says you have a few options.

"You can either leave and claim constructive dismissal (if you have been employed for two years) or you could continue to work, make it clear you are doing so under protest and claim the difference between your contractual pay and the reduced amount paid to you by your employer as an 'unlawful deduction of wages' claim in the employment tribunal," she says.

A constructive dismissal claim is not as attractive as it sounds.

"You have to leave your job, you have to make your best efforts to find another job and only if you are not able to find one will the tribunal award you compensation - in about a year as the tribunals are so busy. This is capped at a year's salary or £115,115 - whichever is the lower."

Is my employer threatening fire and rehire?

"Fire and rehire" is where an employer tries to negotiate a contractual claim and if the employee does not agree, they terminate the existing contract on notice and offer a new one on the new terms. The government has said they will legislate to make any dismissal for failing to agree to changes to the contract automatically unfair. In the meantime, there is a statutory code setting out how employers should act if they want to dismiss employees for failing to agree new terms.

"However, this is unlikely to be a fire and rehire situation," Sunderland says.

"What the employer is likely to be saying is that if employees do not agree to a pay reduction then they will not impose it, they will just have to make other savings and this is likely to be redundancies."

What can the employer do if I don't agree?

The chances are that if cost savings cannot be found elsewhere, and employees will not agree to a pay cut, then the employer may have to start making redundancies, Sunderland says.

"Whether they want to keep the company afloat or maintain their profit level, provided they go through the right process and have considered all alternatives then the redundancies are likely to be fair dismissals."

-SKY NEWS