Asking for more: the legal status of the annual pay review

The annual pay review has almost become a universally accepted feature of modern industrial and commercial life. Neither the employer nor the employee expects that the starting salary will operate throughout the entire period of employment. The desire to preserve the real value of wages otherwise eroded by inflation itself exerts pressure for a pay review and my serve as a minimum objective for the employee seeking a pay increase,. Low levels of profitability (possibly combined with high unemployment) would tend to narrow pay expectations within this minimum objective. Bolder pay ambitions may be asserted where profitability has increased, for example where there have been significant productivity savings or where, in the absence of greater productivity, the “value added” to the product has increased, perhaps as a consequence of the employer’s more advantageous pricing strategy. In either case, pay comparisons with rival groups will mould expectations. Pay grievances may also be fanned by discriminatory pay practices which it may be sought to redress through the annual pay review. Any of these factors will tend not only to exert pressure for a review to take place but also to influence its outcome.