When and how is a demotion justified?

When and how is a demotion justified?

Q: A member of my department has been struggling with their workload and now is beginning to miss important meetings and appointments. Although I want to be sympathetic, I am considering demoting them to a more junior and less demanding role. Can I do that?

A: A member of staff struggling with their workload can lead to a negative impact on the business in a number of ways, including productivity, team morale and the health of the employee themselves. Finding one area of the role difficult can also have a knock-on effect on other parts of the job. Employers need to ensure they are managing this situation and not leaving this issue to continue and grow. 

A failure to keep up with the demands of the role is a capability issue; the employee cannot do their allocated work. Simply carrying out a demotion is likely to be unfair if a full capability procedure is not carried out beforehand. The employee’s struggle with their workload can be addressed informally at the start. Speak to the employee themselves and ask if there are any issues they are aware of which are causing this struggle. This may bring to light an area that they need further training in, or simply cause them to realise there is an issue that they need to address.

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Where the informal approach has not worked, a formal procedure needs to be followed in line with any contractual capability policy. This generally includes holding a formal capability hearing, setting in place a performance improvement plan which identifies the level of improvement needed, any support provided and a reasonable timescale to reach this level and setting in place a formal warning, depending on the circumstances of the case. If the employee does not meet their required level of improvement, a second capability hearing can be held with a further plan, warning and time to improve put in place. 

Only once the formal procedure has taken place will alternatives to dismissal, such as demotion, be available to the employer. Without this procedure, the employee could claim that the demotion is a breach of their contract of employment which entitles them to resign and claim constructive dismissal at tribunal. The right to demote also needs to be contained in the contract of employment as an alternative to dismissal to be a fair decision. 

There may be the opportunity to agree a change of responsibilities or job role with the employee. They may be happy to agree sharing some aspects with colleagues, although a pay cut on this basis may prove more difficult to gain agreement on. Changes to duties should only take place with agreement of the employee involved as any unilateral change to their terms and conditions of employment is likely to constitute a breach of contract. 

Peter Done is managing director of law firm Peninsula