Deloitte puts staff back on full pay a month early
Deloitte has cut short its pandemic-induced pay cuts and has restored full pay to staff from Tuesday of this week.
Professional services and accounting firm Deloitte has cut short its pandemic-induced pay cuts and has restored full pay to staff from Tuesday of this week.
The September 1 date means the 20 per cent pay cuts which began in May will end a month earlier than originally predicted and come as the firm reports a better-than-expected first quarter.
It has not released figures and it is understood the improvement is “modest”.
CEO Richard Deutsch told staff in a “town hall” meeting on Thursday afternoon that all staff who accepted the 20 per cent cut would return to the “pre-variation” amount a month early.
The shift comes against the background of internal disquiet with some staff arguing for an earlier restoration than October.
The firm has also been in the spotlight recently as it faces a federal-court case alleging it has an unlawful retirement policy based on age, and as it deals with the exit of six senior partners from its SAP implementation practice to work with rival PwC.
Deloitte’s pay cuts were set to be the most severe of those imposed by the big four firms, but the adjustment brings it into line with KPMG which set a four-month pay reduction. EY cut pay for three months and PwC for 2½ months.
Mr Deutsch said the pay change was “in response to our first quarter result being ahead of plan. We are cautiously optimistic about the future, noting that there are still challenges in the economy we will need to navigate.”
Deloitte uses a May 31 financial year system and its first quarter covers June, July and August.
In June it reported revenue has grown for the financial year by 10 per cent but there had been a 19 per cent decline year on year in May as the pandemic hit. As a result it launched a redundancy round and exited 700 people from its workforce of 10,000. It is understood that there will be no further redundancies at this stage.
The 20 per cent pay cut was offset by staff receiving an extra 10 days of annual leave. Deloitte will honour this despite the early restoration. The pay cut originally translated to an 8 per cent cut annualised, but it will now be 6.7 per cent.
Deloitte’s fixed distribution partners will also see a reduction in their pay cut. They had agreed to a 20 per cent cut for 12 months but this has been reduced to 10 per cent for the rest of the financial year, translating to a 13.3 per cent annualised cut. Equity partners agreed in April to take a minimum 20-25 per cent reduction in their earnings for at least a full year.
The pay cut did not apply to people earning less than $65,000 and did not leave anyone with less than $65,000.
The exit to PwC means Deloitte lost a quarter of the 16 partners involved in the SAP business unit but Deloitte indicated this week that it was confident it can hire from within to create new partners.
Mr Deutsch said the firm would continue to “recognise our people through promotions earlier than originally planned and through pay reviews”.
He said the good performance in the first quarter was a result of Deloitte’s skills and the dedication and sacrifices made by partners and staff.
Federal Labor on a collision course with miners over green push
The federal government has made a powerful enemy for itself in the west after the Chamber of Minerals and Energy WA said it would fight Labor’s push for so-called nature-positive laws.
Lawsuit levels claims of staff exploitation against Lovisa
Costume jewellery chain Lovisa’s mostly young female staff were exploited, not given proper meal and rest breaks, and even forced to pay for and wear its products each shift, a lawsuit alleges.