A demotion is, essentially, the opposite of a promotion. It normally occurs where an employer offers their employee a detrimental change to their current employment circumstances. This can include a change to remuneration or any benefits that you may be offered in your current position. However, it is important to keep in mind that either the employer or the employee can instigate the demotion due to various reasons.
Reasons for Demotion
If the employer wishes to demote an employee it may be due to underperformance in the current position. This might mean that the employee is failing to fulfil their duties, misbehaving at work or not complying with workplace policies. Another reason could be that the employee does not possess the correct skills for that particular position.
Meanwhile, if an employee decides for a demotion, it could be for a number of different reasons. The first could be that they are overwhelmed in their current position and would like a reduction in workload. This could be due to stress or having to scale back due to a change in family circumstances, meaning they cannot work as much as they used to. Additionally, if an employee is slowly transitioning into retirement, they might scale back their work for when they eventually leave. Finally, an employee could seek to be demoted due to the fact that they want to change their position.
Is It Legal?
Your employment contract determines the legality of your demotion, as well as any Awards or Enterprise Agreements depending on your particular industry. Meanwhile, the Fair Work Act 2009, sets out the minimum standards for each employment contract, protecting against unfair dismissal and unlawful termination.
Hence, it is important to be across this information to understand whether a demotion was legal. If you are unsure, speak to a contract lawyer.
Can an Employee Reject a Demotion?
An employee can and is entitled to reject a demotion. However, in order to do this, an employee should put their concerns in writing. This should explain why they do not accept the demotion. Their supervisor should recieve this and review the circumstances leading up to the demotion. If an employee refuses or rejects their demotion, the next steps would be to either leave the employee in their current position or look into the termination of their employment. This is important to keep in mind as forcing a demotion can become an unfair dismissal claim.
However, if the employee does accept the demotion, a new employment contract should be drafted and signed.
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Unfair Dismissal
Following the point above, demotions can become claims of unfair dismissal if done incorrectly. If an employee does not consent to their demotion and there is a termination of employment, they can file a claim within 21 days of the termination to the Fair Work Commission.
However, if the employee has accepted the demotion with their own free will, this will not be considered unfair dismissal. Further, if there is an express term permitting demotion without termination in their employment contract, once the employee is demoted, it is not considered termination. Hence, it will not fall under unfair dismissal laws. For more information, read our guide about the legality of demotions and unfair dismissal claims.
Conclusion
As an employee, you can reject a demotion. However, it is important to be across unfair dismissal laws to understand whether you are able to put in a claim. If you have been recently demoted and have more questions, speak to an employment lawyer.
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