Demotion: What can you do if you’re demoted?

Dealing with the prospect of a demotion can be extremely stressful, as not only will it affect your status at work, but it could also impact your salary.

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    Disputes about demotion also often lead to instances of unfair dismissal and constructive dismissal.

    Here we explain more about demotions, give examples of where they could be lawful and offer guidance on what to do if you think you are about to be or have been unfairly demoted.

    See also our guides on Constructive dismissal, Unfair dismissal, Employment contracts and Breach of employment contract.

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    What is demotion?

    Demotion is when your role is changed by your employer, so you have less responsibility or a lower salary level.

    For example, if a business is restructuring, or if they believe your job performance has been poor or you have been found guilty of misconduct, your employer may seek to demote you.

    Sometimes, in a redundancy situation, your employer may offer you a demotion as (what they suggest is) “suitable alternative employment”.

    Depending on the situation and the process used to demote you, it may be lawful for your employer to do this, although a claim could be made against your employer in certain circumstances if you believed the demotion was unfair.

    There are also times when it can be difficult for employees to identify when demotion has happened.

    An example would be when a department is being reorganised and as a result, you have a less senior role than before even though you have the same pay.

    You may need legal advice to help you assess whether there is a claim you can pursue and if so, what type of claim.


    Is it lawful to demote me?

    In general terms, your employer is not legally permitted to demote you or otherwise change the terms of your employment contract without seeking your consent.

    Doing so would put them in breach of contract, which would open the possibility of you resigning as a result and claiming constructive dismissal.

    Alternatively, while you continued to be employed in the job you’d been demoted to, you could pursue a claim for unfair dismissal and/or unauthorised deductions from wages.

    If you don’t agree with the demotion, it’s important for you to make it clear – in writing – that you disagree with it, even if you continue to work in the demoted job role.

    Having said that, there are some specific situations where an employer can alter your contract by demoting you without being in any breach of the law.

    Whilst many contracts contain general powers for an employer to change terms and conditions, such a power is unlikely to permit a significant demotion.

    However, if, for example, your contract contains a clear clause that allows the employer to change the terms and conditions including your job role and/or status without your consent, this could be lawful.

    Even in these circumstances, an employer must follow a fair process and any changes proposed must be reasonable, such as asking you to work in a different location in the same town.

    Whether a demotion is likely to be reasonable will be dependent on the facts of the case.


    When is an employer allowed to demote you?

    Even if your employment contract does not include a clause that states your employer can change the terms and conditions, there are other circumstances where they may be able lawfully to demote you.

    For example, you’ve committed an act of gross misconduct. You have received a warning that you will be demoted or else you will be dismissed.

    However, employers must ensure that any sanctions such as this are proportionate and permitted within the terms of the contract. If they aren’t proportionate, or clearly included as a sanction, it could mean you have been unfairly treated.

    In this case, you could resign and make a claim for constructive unfair dismissal.

    As mentioned earlier, a demotion could also be proposed by your employer as part of redundancy or company restructuring, although this should not be the only option offered to you. (See our Redundancy guide for more.)


    How can demotion lead to a claim for unfair dismissal or constructive dismissal?

    If you have two years of service and have been demoted, then the demotion may amount to a dismissal (even though you continue to be employed).

    If demotion is not a sanction permitted within the employer’s disciplinary policy then you may have a claim for unfair dismissal.

    There are situations where demotion can be viewed as the first step toward dismissing an employee.

    If you are dismissed a short while after being demoted and have two years of service, it could also allow you to make a claim for unfair dismissal.

    As mentioned earlier, if there is no clause stating otherwise, employers are generally not allowed to change your contract terms in a way that has a negative impact on you without first getting your (written) consent.

    If this happens, it could be viewed as a breach of contract, entitling you to resign and then claim constructive dismissal.


    What can I do if I have been unfairly demoted?

    If you find yourself in a position where your demotion appears to be unfair, then you have a few options open to you, including the following:

    Submit a formal grievance

    If you haven’t already done so, you should lodge a formal grievance with your employer against the demotion.

    Going through an internal grievance procedure will give you an opportunity to discuss your grievance in the hope of finding a better solution.

    Work under protest

    Rather than resigning from your role, you may decide to work under the proposed new terms but make it clear to your employer (in writing) that you do not agree to or accept them.

    This is known as ‘working under protest’ and preserves your right to take legal action against your employer in the future

    It is not advisable to work under these conditions for too long as it could affect any future claim you wish to make.

    If you choose to work under protest for a short while, you should regularly remind your employer in writing that you are dissatisfied with the situation.

    This will ensure that there is a clear written record for future reference if it’s needed.

    Seek legal advice

    It is always advisable to seek legal advice in these circumstances to discuss your options and before you do anything drastic such as resigning.

    This is especially true if you haven’t been working for your employer for at least two years, as it could mean that you can’t actually make a legal claim.


    Next steps

    If you are facing the prospect of demotion or think you’ve been unfairly dismissed by your employer because of a dispute about your demotion, Monaco Solicitors is here to help.

    We are specialists in dealing with unfair and constructive dismissal cases and can give you expert legal advice so you can make well-informed decisions about your next steps.

    Our terms are competitive and transparent and If we can help you, we will do so promptly and cost-effectively, while always seeking the best outcome for you.

    To find out more about our no-obligation consultation, contact us:

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