Can an Employee Reject a Demotion?

Table of Contents

Share at:

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.

Get on demand legal advice for one low monthly fee.

Sign up to our Legal Advice Plan and access professional legal advice whenever you need it.

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.

Find the perfect lawyer to help your business today!

Get a fixed-fee quote from Australia's largest lawyer marketplace.

Share at:

Simplify creating legal documents today

Browse through Lawpath's AI tools which can be used to draft, review and refine legal documents today!

Related Articles

How to Get a Reptile Licence

Thinking about keeping a reptile as a pet? Find out which types of reptiles you can keep and how to go about obtaining the right licence.

How to Find Your Tax File Number (TFN)?

Misplaced or forgotten your Tax File Number (TFN)? Read this article to learn ways you can find out your tax file number.

How Do I Add A Partner To My Business?

So you've started your business and everything is running smoothly. So smoothly, in fact, you need a trusted partner to help you manage things from the top. How do you do it?

How to Set Up a Family Trust (2026 Update)

Setting up a family trust requires careful planning and an understanding of how trusts operate. Find out how to get started here.

Quick Tips: Legal Documents For Business Founders

Learn about the legal documents, including Shareholder's Agreement and Vesting Agreement, that you may need when starting a business.

Why your business needs a Shareholders Agreement

Learn about a shareholders agreement, what it includes and how it can be beneficial for your business.