Salary reduction proposal to avoid redundancy letter template

£ 15

If you have proposed a salary reduction as an alternative to redundancy, send this model letter to them to confirm the proposal and request their agreement.

Why this letter is necessary

A salary reduction proposal to avoid redundancy letter is used to inform employees that the company is exploring alternatives to potential redundancies in the way of a permanent or temporary reduction in salaries. The letter aims to explain the proposal in detail, including the percentage or fixed amount of the proposed salary reduction and the duration of the proposed reduction (if temporary).

The purpose of the letter is to encourage employees to consider the proposal and to provide them with an opportunity to ask questions and express concerns. The letter is intended to be transparent about the financial challenges facing the company and to seek the input and cooperation of employees in finding a solution that works for everyone.

Ultimately, the purpose of the letter is to avoid redundancies and to support employees during a challenging time. The letter communicates the company's commitment to finding alternatives to job losses and to working collaboratively with employees to find a solution that is fair and reasonable for all parties involved.

Workflow sequence

Previous step
Final individual redundancy consultation meeting invitation letter template

If you need to conclude consultation with a provisionally selected employee, send this model redundancy consultation final meeting invitation letter template.

This step
Salary reduction proposal to avoid redundancy letter template
Next step
Changes to terms and conditions of employment letter template

This document is used where the Company wishes to change certain terms and conditions of employment with agreement of the employee.


Reading time icon
Time to read / prep / use
5 mins
Document specs icon
Word count / length
326 words, 2 pages A4
Date last reviewed icon
Date last reviewed
1 June 2024
salary reduction proposal to avoid redundancy letter template

[Company name]

[Sender address]



[Recipient name]

[Recipient address]


Dear [Recipient first name],

I refer to my meeting with you on [date], during which we discussed whether you would be willing to agree to a reduction in your current basic salary level. The proposed salary reduction would be [insert details, such as a percentage or a fixed amount][, and it would be in effect for [insert duration, such as three months or six months]]. We understand that a salary reduction is a significant change, and we want to assure you that we will do everything we can to minimise the impact on your finances.

As I explained to you, due to the current economic climate, our company is facing significant financial challenges. As a result, we are exploring all possible options to avoid redundancies, including a proposal for a temporary reduction in salaries. However, I must advise you that if we do not obtain sufficient employee consent to implement the salary reduction arrangement proposed, we may be left with no alternative but to consider other ways of managing this current situation, including redundancy.

With your consent, we would propose that your salary reduction take effect from [date]. Your other terms and conditions of employment and your continuity of employment would not be affected.

In the circumstances, I would ask you to consider the proposed salary reduction arrangement fully and, if you are willing to accept it, please confirm your acceptance by completing the attached acceptance slip and returning it to me as soon as possible and in any event by no later than [date].

We understand that this may be a difficult time for you, and we want to assure you that we are here to support you in any way we can. We value your contribution to our company, and we believe that together, we can overcome these challenges.

If you wish to discuss any aspect of this letter or you would like to have a further meeting to discuss our proposal, please do not hesitate to contact me.

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Yours [faithfully | sincerely],



[Sender name]

[Sender job title]

[Sender telephone]
[Sender email]

Why choose our Salary reduction proposal to avoid redundancy letter template?

Our content:

Is easy to edit and execute, with comprehensive implementation guidance.
Is designed by accredited, experienced HR practitioners.
Maintains your compliance with ACAS guidelines, legislation, and industry best practices.
Includes 12 months access to your purchase, with email alerts if updated or expanded.

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