A Salary Reduction Letter Due To Poor Performance is a crucial document used when an employer needs to formally implement a reduction in an employee's compensation due to documented performance issues. This document is specifically designed for use in the Australian jurisdiction and must comply with the Fair Work Act 2009, relevant modern awards, and state-specific employment regulations. It typically follows a series of documented performance discussions, warnings, and improvement opportunities, serving as the final step in formalizing the changed employment terms. The letter must carefully balance the employer's right to manage performance with employee protections under Australian law, including ensuring the reduced salary remains above relevant minimum wage requirements and award rates.
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1. Letter Header: Company letterhead, date, and formal addressing of the employee including their full name and position
2. Opening Statement: Clear statement of the letter's purpose and reference to previous performance discussions
3. Performance Issues: Specific details of performance concerns, including dates and examples of underperformance
4. Previous Actions: Summary of prior warnings, performance improvement discussions, and support provided
5. Salary Reduction Details: Specific details of the new salary, the reduction amount, and effective date
6. Legal Compliance Statement: Confirmation that the reduction complies with relevant awards, enterprise agreements, and minimum wage requirements
7. Next Steps: Clear outline of expectations going forward and any performance monitoring processes
8. Acknowledgment: Space for employee signature acknowledging receipt and understanding of the letter
9. Closing: Signature block for employer representative with full name and position
1. Performance Improvement Plan: Details of specific targets and timeframes for improvement, used when offering the employee an opportunity to improve before further action
2. Review Period: Specification of a review period after which the salary reduction will be reassessed, included when the reduction is temporary or conditional
3. Appeal Process: Information about internal grievance procedures or appeal rights, included when required by company policy or industrial instruments
4. Union Representation: Reference to the employee's right to union representation, included when the employee is covered by a union agreement
5. Employee Assistance Program: Information about available support services, included when the company offers such programs
1. Performance Review Documentation: Copies of recent performance reviews or assessments supporting the decision
2. Meeting Minutes: Records of performance discussion meetings and warnings
3. New Salary Details: Detailed breakdown of the new salary structure including any affected allowances or benefits
4. Performance Metrics: Documentation showing specific performance metrics and targets not met
5. Legal Requirements Checklist: Checklist confirming compliance with relevant awards, enterprise agreements, and minimum wage requirements
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Relevant Teams
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Employee Relations
People & Culture
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HR Business Partner
Employment Relations Manager
Department Manager
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Chief Human Resources Officer
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