Disciplinary demotion letter

Instead of dismissing an employee for misconduct or gross misconduct, it is permissible to demote them as a disciplinary sanction provided this is on a temporary basis and you have the contractual right to do so. Our disciplinary demotion letter is for use in this case.

Contractual right

Demotion is the act of reducing an employee’s status or contractual entitlement, i.e. putting them into a lesser job role, usually on lower pay. You have no automatic right to demote an employee as a disciplinary sanction, however heinous their misconduct. To be able to impose a demotion, you need a specific power in the employee’s contract of employment. This, in turn, is subject to the implied term of mutual trust and confidence, so would need to be for a temporary period only and be linked to disciplinary proceedings as an alternative sanction.

Before demoting an employee as a disciplinary sanction, always check you have the right to do it in the employee’s contract. You will also need to ensure the relevant clause permits a commensurate reduction in the employee’s salary for the demotion period. A well-drafted clause should also set out the maximum duration of any demotion. Ensure you comply with the terms of the relevant clause in exercising your power to demote. Also, only consider demotion in exceptional cases where the circumstances warrant it. Issuing warnings/implementing dismissals should be the “norm” for misconduct offences.

Practical use

Our Disciplinary Demotion Letter is for use in two scenarios:

1. The employee is to be demoted instead of being dismissed on notice. If you were already at the final written warning stage with the employee but don’t want to proceed to a dismissal, a disciplinary demotion can provide a useful alternative solution to issuing a second final written warning, or you could still issue a second final written warning to run alongside the demotion.

2. The employee could have been dismissed for gross misconduct but is instead to be demoted. In this case, the employee has only managed to keep their job because there were mitigating factors etc. so you don’t want to dismiss them but want to give them another chance to prove themselves in a lesser role.