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Salary Increase Rejection Letter Template for England and Wales

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Key Requirements PROMPT example:

Salary Increase Rejection Letter

"I need a Salary Increase Rejection Letter for a mid-level software developer who requested a 15% raise, citing strong performance, but we need to decline due to current budget constraints while keeping them motivated for a potential review in March 2025."

Document background
A Salary Increase Rejection Letter is used when an organization needs to formally respond to an employee's request for a pay rise with a negative decision. The document, governed by English and Welsh law, must be carefully drafted to ensure compliance with employment legislation while maintaining professional relationships. It typically follows a salary review process or formal request and should include clear reasoning, future opportunities for review, and any relevant performance-related feedback. The letter serves both as a communication tool and a formal record of the decision.
Suggested Sections

1. Recipient Details: Employee's name, position, and department

2. Reference to Request: Acknowledgment of the salary increase request and when it was made

3. Decision Statement: Clear statement of rejection decision

4. Justification: Business reasons for rejection

5. Next Steps: Information about next review period or alternative opportunities

Optional Sections

1. Performance Feedback: Include when rejection is performance-related and providing constructive feedback could help future progression

2. Alternative Benefits: Other forms of compensation or benefits being considered, used when alternative rewards or opportunities are available

3. Appeal Process: Information about how to appeal the decision, included when company policy allows for appeals

Suggested Schedules

1. Performance Review Summary: Optional attachment summarizing recent performance reviews when rejection is performance-related

2. Salary Review Policy: Company's salary review policy document, attached when referencing specific policy points

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions










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Relevant Industries
Relevant Teams
Relevant Roles
Industries

Employment Rights Act 1996: Primary legislation governing employment rights in England and Wales. Ensures fair treatment of employees, protects against unfair dismissal if the employee resigns in response, and sets out basic employment rights.

Equality Act 2010: Anti-discrimination legislation that prevents salary decisions based on protected characteristics (age, gender, race, disability, etc.). Ensures consistent treatment across similar employee groups.

National Minimum Wage Act 1998: Legislation ensuring that current salary remains above legal minimum wage requirements and consideration of living wage requirements where applicable.

Data Protection Act 2018 and UK GDPR: Legislation governing the handling, storage, and processing of personal information and salary-related data in employment documentation.

Contract Law Principles: Legal framework covering existing employment contract terms, contractual obligations regarding pay reviews, and collective agreements where applicable.

Custom and Practice: Established workplace conventions including previous salary review practices, company policies and procedures, and relevant industry standards.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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