Acumen News & Events

17 May 2010

Case Study: Is Demotion an option?

Demotion: a viable alternative?

The facts:

A is an employee of X Company. A keeps leaving work early to pick up her son, who has been having trouble at school.  As a result A is beginning to miss important meetings and appointments. X Company is trying to be sympathetic but A’s conduct is starting to affect the Company and its business. 

The question: Can A be demoted to a more junior and less demanding role?

The Law:

Could X Company face a Tribunal claim? 

Demoting an employee usually involves changing one or more terms of the employment contract. For this reason it can only be done with the employee’s agreement. To impose a demotion without an employee’s agreement could lead to a possible claim to recover any reduction in A’s pay. Alternatively if A were to resign in response to her demotion she could also potentially claim constructive dismissal.

There may be an exception IF the employee’s contract allows for demotion as a disciplinary penalty or poor performance. In such instances it would be unlikely that imposing a demotion would constitute a breach of contract, provided an appropriate disciplinary or performance procedure is followed.

However employers should be aware that breach of contract and constructive dismissal are not the only risk!

Employees also have a legal right to reasonable time off work to take necessary action to deal with certain situations affecting their dependants. One such situation to which this right applied is an unexpected incident involving the employee’s child during school hours. This appears to encompass A’s situation.This right would allow A to unpaid time off to deal with the situation which arises. In exercising the right A must tell their employer the reason for their absence and how long they expect to be away from work as soon as is reasonably practicable.

Whether or not the time taken off was ‘reasonable’ and whether the actions of the employee are considered to be ‘necessary’ will depend on the circumstances of the case and are ultimately issues to be determined by an Employment Tribunal. But, there does seem to be a good chance that the time off taken by an employee would be covered.

So what does this mean for X Company?

The law protects employees against suffering a detriment as a result of exercising this right. A demotion resulting from an employee exercising their right to take time off would constitute a detriment and irrespective of the contractual position there would be a substantial risk of X Company facing a claim for A’s financial losses flowing from the demotion and an award for injury to feelings.

If A’s conduct were not for reason of exercising the right to take time off for dependants then employers may still face a potential claim from demoted employees. However the risk of any such claim would be substantially reduced provided X Company could show they followed the appropriate disciplinary or performance procedure.

Thinking of demoting an employee? Call us today for information on the correct procedure your Company should follow and avoid unnecessary Tribunal claims.