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I have been working with a subsidiary of IDBI Bank since April 2010. Last month, the HR head called me and told me that a deduction of 35% would be made to my salary since the company was not doing well. As such, my salary was to become Rs. 25000 per month. However, I am aware that on the same day variable pays, increments and promotions were made on the same day vis-a-vis other employees. They gave us the notice 4 days prior to our June salary. They have also closed down 17 branches across country and sent termination letters to approximately 70 staff members.
Please advice how to deal with the situation. The deduction is very biased as the same seems to have been done for only 15 employees from the Head Office and the range of deductions varies from 5 to 40%.
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To the best of my knowledge, reduction of basic salary which would lead to reduction in benefits such as provident fund etc, is not allowed.

I sourced this from one of our extensive discussions on citehr.com

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THE EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952

(Act No. 19 of 1952)

Dated 4th March, 1952

12. Employer not to reduce wages, etc.

No employer in relation to an establishment to which any Scheme or the Insurance Scheme applies shall, by reason only of his liability for the payment of any contribution to the Fund or the Insurance Fund or any charges under this Act or the Scheme or the Insurance Scheme reduce whether directly or indirectly, the wages of any employee to whom the Scheme or the Insurance Scheme applies or the total quantum of benefits in the nature of old age pension, gratuity, provident fund or life insurance to which the employee is entitled under the terms of his employment, express or implied.

Employer is not supposed to reduce wages(which refers to Basic Pay) to minimize any benefit.

attribution Can basic salary be reduced? - pf deduction.. CiteHR Page 3

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Having said that, if terms or the nature of your service with the organisation have been altered, the same may be used as a pretext to reduce/ alter your salary.

Please feel free to address further concerns.
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