Lavery Modise and Sicelo Mngomezulu

Lavery Modise and Sicelo Mngomezulu

The Labour Relations Act makes provision for the demotion of an employee in the right circumstances.

Demotion is defined as a reduction of the dignity, importance, responsibility, power or status of an employee even if his or her salary and attendant benefits and rank are retained.

Employers often resort to demotion in circumstances where a dismissal, as a disciplinary sanction, would be justified.

This happens when an employer, instead of dismissing an employee, opts to demote such employee.

Before an employer can demote an employee he is obliged by law to follow a fair procedure.

This means a demotion cannot be effected unilaterally by an employer without consulting with the employee.

Should an employer demote an employee without affording him or her the right to be heard, it could amount to an unfair labour practice.

The courts have on occasion ordered reinstatement of employees in instances where a fair procedure was not followed before demoting an employee.

In Van Niekerk v Medicross Health Care Group (Pty) Ltd an employee was demoted from a managerial position to a mere clerk.

After considering the evidence, the Commission of Conciliation, Mediation and Arbitration (CCMA) ruled that before the employee was demoted the employer should have consulted and counselled the employee.

In the circumstances, the CCMA found that the employer's action amounted to a unilateral change in the terms and conditions of the employee's employment.

The employer was accordingly ordered to reinstate the employee to her former position as a manager.

The unfair demotion of an employee is not necessarily cured by the fact that his or her salary and benefits remain the same.

In the case of Van Wyk v Albany Bakeries Limited & Others the labour court held that the demotion of an employee from a position of regional manager to that of branch manager amounted to a demotion, even though the salary and benefits remained unchanged.

The court also held that the employee had a choice of either referring the dispute concerning the unfair labour practice to the CCMA or accepting his repudiation and suing for contractual damages.

Even though the employee's salary was not reduced, his status was downgraded from being a regional manager to branch manager.

A mistaken impression in the mind of an employee regarding a demotion will not render the employer's action unfair.

This principle was spelt out in the case of Julies v The University of the Western Cape.

In this case the employee, who was under the mistaken belief that he had been appointed as a director, referred an unfair labour practice dispute to the CCMA based on an alleged demotion, when in fact his appointment had not been confirmed by the employer.

In the absence of any such misrepresentation on the part of the employer, the CCMA found that since the employee had not in fact been promoted, he could not have been demoted.

In the case of a dismissal for operational requirements (retrenchment) an employer may propose to an employee that instead of losing his job, he should consider the reduction of his status by accepting an inferior position to the one that he previously held, as well as the reduction of his salary as an alternative to retrenchment.

l Lavery Modise is a director and Sicelo Mngomezulu is an associate at Routledge Modise in association with Eversheds