For most employment, demotion is a better option than disciplinary action or terminating an employee. However, the demotion option involves certain legal risks that employers should know.
Besides causing anxiety, the parties involved in a demotion, such as employers, HR departments, affected employees, and colleagues, are affected in different ways.
Demotion results in various changes, such as reduced duties and responsibilities, lowering the job title (rank), and salary reduction. Unfortunately, the demoted employee can suffer low esteem and become unproductive, particularly if they’re wrongfully demoted.
Also, work relationships between demoted workers and colleagues can be strained. If you believe you’ve been unfairly demoted, you should contact top employment lawyers in Southern California for legal counsel.
Common Causes of Demotion
The common causes of employment demotions can include:
1. Misbehavior or Disobedience
Demotion can be the punishment for misbehavior, breach of discipline, or disobedience in some companies. An organization can only achieve its goals if employees are disciplined–punitive actions, such as demoting undisciplined workers, should be imposed to enhance discipline.
2. Neglecting Assigned Duties
Employees who continuously fail to deliver the expected results can be punished through demotion.
3. Unmerited Promotions
Promotions should be based on merit but sometimes that’s not the case. The promoted employee in such cases can be demoted from their current to the former position to correct the situation.
4. Physical Challenges
Physical challenges, such as health deterioration can force the management to assign lighter duties to the affected worker. Although employment law prohibits workplace discrimination based on physical status (disability) certain situations can force an employer to assign lighter duties to an employee–this is a classic example of an exemption for the non-discrimination law. Assigning lighter duties to a disabled worker is a potential demotion.
5. Incompetence to Execute Duties
Incompetent employees are unfit to perform their roles effectively and demotion might be the best option in such cases. The employer can demote an incompetent employee to see whether they’ll improve.
6. Adjustment Challenges
Sometimes promoted employees are not able to adjust to the new working environment, affecting their performance. Although such challenges are beyond the employee’s control, the employer/ management may have no choice but to demote the affected employee.
7. Organizational Changes (Restructuring)
Restructuring occurs when a company the financial or operational structure is significantly changed. The restructuring process can involve combining several departments to eliminate redundancy–meaning employees in the affected department will be forced to assume lower positions. Restructuring can be influenced by different reasons, such as:
- When companies are experiencing financial difficulties;
- When the ownership of a company changes hands through a sale, buyout, or merger.
- And, when the overall goals of a company change;
8. Changes in Work Processes and Systems
Technology change might force a company to adopt a different way (processes and systems) of running, rendering some workers redundant. The management or employer is forced to redefine the roles of affected workers instead of terminating their services.
9. Employee Requests
Requesting a demotion is not a common practice for employees because the ultimate goal of most workers is to earn as many promotions as possible to earn more.
However, an employee can request a demotion in some cases. For instance, a worker may ask for a demotion to reduce their responsibilities if they want to achieve a better work-life balance.
Legal Considerations Related to Demotions
Demotions can present certain challenges that can attract liabilities for a company. So, here’s what employers or HR departments need to consider before demoting an employee.
1. Consultation and Consent
The targeted employee should be consulted before changing their roles considering that a demotion can significantly impact an employee’s contract. In addition, the employee, who is to be demoted must give consent before changes are implemented.
Employees should be notified of an impending demotion earlier enough to give them enough time to weigh their options and make better choices.
The consultation process should include a face to face meeting between the worker and employer for discussing the proposed demotion
2. Consider dismissal
If consent is not given by the affected employee, the employer can consider termination. However, employees should be aware that failing to accept a demotion can attract such consequences.
Otherwise, dismissing a worker for rejecting a demotion can attract legal action for wrongful termination.
3. Legal Risks
Employers need to understand that an employee can file a claim with the employment tribunal in their respective jurisdictions. Employees who have worked for 2 or more years in a company can file such claims.
The best approach would be to involve an employment lawyer to avoid unnecessary lawsuits that can expose you to substantial financial liability.
The Civil Rights Act prohibits workplace discrimination based on race, gender, sexual orientation, disability age, religion, and others. Consequently, employers should tread carefully to avoid violating the provisions of this Act, exposing themselves to costly lawsuits.
There are better and more effective options for managing employees, such as supporting and training workers in a performance-based work environment. The alternatives to demotion can yield better results for employers and workers alike.
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