Demotion at work legal rights
If your employer has changed your role by reducing your remuneration or reducing your duties, you may have certain rights.
What is demotion?
A demotion occurs where an employer unilaterally (i.e. without your agreement) alters an employee’s contract of employment in a circumstance where they have no contractual entitlement to do so.
Demotion occurs where there has been a detrimental change to an important aspect of your employment. This may involve a reduction in your salary, changes to your responsibilities and duties, or a relocation. Demotion generally occurs in two contexts:
- In circumstances that are not connected to your employment conduct including a merger, change of company ownership or restructure; or
- In circumstances connected to your employment including misconduct or disciplinary action.
Is this legal?
There are some circumstances that an employer can legally demote an employee. To determine if your demotion was lawful make sure you check the following:
1. Your employment Contract
Many employment contracts contain an express provision that allows for demotion, or the power to vary specific aspects of the employment relationship. This can include your title, reporting structure, remuneration location or employment, or classification.
For example, if there is a clause such as “the parties agree that your position, duties, roles and levels of responsibility may be varied from time to time” – then your prospects of success are low.
If your contract contains a clause such as this, a demotion can be considered a lawful and reasonable direct and may be lawful – your employer has a contractual entitlement to do so.
2. Your award
Even if your contract of employment allows for changes to your position, if you are covered by a Modern Award or Enterprise Agreement, all changes to your employment must be done in accordance with these.
For example, if you are covered by the General Retail Industry Award 2010, your employer will need to comply with the consultation duties under Part 2.
If your relevant industrial award or instrument expressly allows for demotion without termination of employment, the demotion may be lawful.
If your employer has not complied with their duties under the Award, you may be able to take steps to rectify this.
If your employer does not have an express right to alter the terms of your employment, you may have a claim for unfair dismissal.
If a demotion involves a significant reduction in duties or remuneration, it may constitute a ‘dismissal’ even if the person demoted remains employed by the employer. If the demotion did not involve a significant reduction in duties, AND you remain employed with your employer, your claim will not succeed.
If your claim is successful, the Fair Work Commission may require your employer to reinstate you to a similar position to the original role. This may also include an order for back payment of wages you have lost.
In order to apply to the Fair Work Commission you must
- Have completed at least 6 months at your place of employment (or 12 if you work in a business with 15 people or less); and
- You must either:
- Be covered by a modern award
- Be covered by an enterprise agreement; or
- Earn less than the “high-income threshold” which is currently $148,700
But be quick, You only have 21 days from the time of the demotion to commence this.
Note: other legal claims which may be available
If you have been demoted, the action may trigger application of another right under the Act.
If you believe that the demotion is due to you exercising a workplace right, or because of a protected attribute (such as your race, sex, age, disability, sex or carer’s responsibilities) then you may be able to commence a general protections application.
If you believe the changes to your employment are due to workplace bullying, you may be able to commence a stop-bullying application.
If you would like to agitate one of these options, contact one of the expert lawyers at Resolution 123 and we can help you pursue your claim.