Home Page ->
Legal Articles -> Can employers demote you to save money?
Welcome to Scorpion’s Legal Tips! Every week we’ll share stories of injustice and show you how you can strike back legally.
A demotion is when there is a change to the employee’s terms and conditions of employment that results in less pay, responsibility or status. How do you know if you’ve been demoted?
The employer needs the consent of the employee to implement a demotion, or it becomes a unilateral change to the employment agreement. Demotion without consent is a breach of your employment contract, and you can then sue your employer for breach of contract.
Demoting can also only be done for a valid reason.
Employers may consider demotion as a way to avoid retrenchment. This is a valid reason for demotion because even though the employee is earning less, they still have a job. You can refuse the demotion, but your reason for doing so has to be valid and justifiable. If you feel it is unfair or that proper procedure was not followed, you can contact the CCMA for assistance. If you unreasonably refuse to accept the demotion though, you will not be entitled to severance pay.
Demotion as a disciplinary measure can also happen. It is only allowed in circumstances where your employer is justified in dismissing you, but decides not to dismiss you. The employer must have carried out a disciplinary hearing with you, and the result of this hearing must be that you will be demoted as a disciplinary action. Demotion is also fair in situations where the employee is just not meeting the requirements of the job, and may perform better in a lower position. But again, the employer must consult with the employee before demoting them.
In all of the above situations, consultation must take place before the demotion. Regardless of the reason for demotion, the employer is not allowed to just implement the demotion without consulting with the employee first, as this would be a unilateral change to the employee’s contract of employment – which is illegal.
There are many cases where demotion is unfair, for example, an employer may not demote employees because they dislike them, want to punish them for poor performance (without going through the proper procedures first), want to create a vacancy for someone else to fill or because the employee is not able to carry out their job due to illness or injury. Employees who have been unfairly demoted may refer their matter to the CCMA.
If you have a query, follow us on Facebook and ask your question during our next Live Q&A (the first Thursday of every month).
* This is only basic advice and cannot be relied on solely. The information is correct at the time of being sent to publishing.
Date added: 12 August 2020
If you prefer to leave us an online query, please complete the form below and we will call you back.
Please select an enquiry type
Membership card / policy update query
Income Tax query
Last will & testament
Please select a complaint type
Poor service/Rude staff