Can an employer stop paying because of slow software development?.
- start up company.
- no written contract.
- employer doesn't want to fire anyone at least.
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Would you be willing to work for free?
Bad idea for yourself (becoming a slave) and the workforce (who need to earn a living) in your industry in general.
You could get together with others and demand payment and threaten to leave as a group otherwise.
Make sure to get written contracts.
However, even in that case, you're gambling that they may pretend to agree and a month later won't pay or declare bankruptsy.
So my advice is RUN !
EDIT (in light of your recent comments):
I only skimmed it and it seems there are fair labor laws in effect in the Philippines.
One thing paused my reading though:
Art. 101. Payment by results.
The Secretary of Labor and Employment shall regulate the payment of wages by results, including pakyao, piecework, and other non-time work, in order to ensure the payment of fair and reasonable wage rates, preferably through time and motion studies or in consultation with representatives of workers’ and employers’ organizations.
I'm not certain, but maybe they could try to use the "slow software development" as means to apply this.
However it seems that they can't simply determine the amount paid (which still needs to be "fair and reasonable", NOT zero) by themselves.
An underlying problem is that you have no contract and another red flag is that they are foreign investors.
So regardless ... RUN ...
This is probably just a threat to speed up the development team.
While I would advise putting out feelers for alternative work, you should be doing that anyway since you don't have a contract.
Apart from that you can just keep working until such time as this becomes more than an empty threat and they actually attempt to enforce it, which is probably never.
Jumping up and down before then isn't productive.
Working without a contract has benefits and drawbacks. But it also means that you can walk out whenever you want without repercussions, and non payment would be a walking reason.
Depending on the country this could very well be illegal. While you probably don’t want to stay working for them it is grounds to sue them for your pay which they would be liable for and you could include damages such as court fees etc...
Check your country laws and decide what level of action you wish to take.
This would be a legal question. In most countries, the absence of a written contract means that there is a contract, containing what is normal for that situation in your country. If it is normal in your country that your employer adds a clause to your contract that you are not getting paid in certain situations, then it is fine - except in countries where it is illegal not to pay you when you worked. Which is most countries.
I would do two things: Tell your employer that you will be paid for your work, no matter what he thinks what will happen. Not paying will only land them in court. And the other thing obviously is to look for a job elsewhere.
In most countries, just like your boss could fire you immediately if you are found stealing things from the company, you can fire the company immediately if they refuse to pay for your work.