Employers warned against demoting employees without holding a hearing

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While there may be valid reasons to demote an employee, employers should make sure the process is done fairly.

lvan lsraelstam, chief executive of Labour Law Management Consulting, says regardless of the reason for demoting an employee, the employer is advised to hold a hearing before implementing a demotion for reasons of poor performance or misconduct. 

He says while the Labour Relations Act (LRA) does not specifically require a hearing in such cases, it is important to hold a hearing because the spirit of the LRA requires that it is unfair to punish an employee without giving him/her a chance to defend the case.

“Failure to hold the hearing will make it difficult to prove, on record, that the employee was guilty and that the reason for the demotion was fair,” he says.

According to Ivan, what constitutes a demotion is not always straightforward. In different circumstances alleged demotions can occur in numerous ways including the following:

  • The employer gives the employee a letter stating that he/she has been demoted
  • The employee’s pay and/or responsibilities are reduced
  • The employee’s subordinates are taken away
  • The employee is required to report to someone who used to report to him/her
  • An employee acting temporarily in one position gets transferred back to his/her old position

“Regardless of the circumstances, employers are advised to take the law into account before doing anything that could potentially resemble demotion,” he says.

If the CCMA or bargaining council find the demotion to be unfair, the arbitrator has the right to reinstate the employee into the position from which he/she was demoted, award the employee compensation or apply any other corrective measure that he/she deems to be appropriate. 

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