It is illegal for a company to unilaterally reduce its salary, even if it does not dismiss its employees. According to the provisions of the Labor Contract Law, the change of the labor contract shall follow the principles of equality, voluntariness and consensus through consultation, and shall not violate the provisions of laws and administrative regulations. If the employer causes the laborer to sign or change the labor contract against his true meaning by means of fraud, coercion or taking advantage of the danger of others, the labor contract is invalid. In addition, the employer shall pay the laborer's labor remuneration in full and on time in accordance with the labor contract and state regulations. If the employer is in arrears or fails to pay the labor remuneration in full, the employee may apply to the local people's court for a payment order according to law.
Legitimacy of the company's salary reduction:
1. The legality of salary reduction depends on compliance with relevant laws and regulations;
2. Legal salary reduction usually requires consultation with employees and modification of labor contracts accordingly;
3. If the company unilaterally reduces the salary, and the salary reduction is beyond the scope prescribed by law, it may be considered illegal;
4. Employees have the right to refuse unreasonable salary reduction requirements and can safeguard their rights and interests through legal channels.
To sum up, it is illegal for a company not to dismiss because of poor management. According to the Labor Contract Law, it is illegal for a company to unilaterally reduce its salary. Changes to the labor contract shall follow the principles of equality, voluntariness and unanimity through consultation, and shall not violate the law. Employees have the right to refuse unreasonable demands for salary reduction and can safeguard their rights and interests through legal channels.
Legal basis:
People's Republic of China (PRC) labor contract law
Article 29
The employer and the employee shall fully perform their respective obligations in accordance with the provisions of the labor contract.
Article 30
The employing unit shall, in accordance with the labor contract and state regulations, pay the laborers' labor remuneration in full and on time. If the employer is in arrears or fails to pay the labor remuneration in full, the employee may apply to the local people's court for a payment order according to law, and the people's court shall issue a payment order according to law.
Article 35
The employer and the employee may change the contents of the labor contract through consultation. Changes to the labor contract shall be made in written form. The revised text of the labor contract shall be held by the employer and the employee respectively.