Demotion is the opposite of promotion. It means reduction in rank or placement from a higher position to a lower one. This can sometimes involve a reduction in salary or a salary freeze. Demotion can be applied to employees who are performing inadequately, as sanction for misconduct or in connection with a reorganization.
A demotion by is in principle a unilateral modification of the employment agreement. which entails that both the employer and the employee must agree to it. However, Supreme Court case law shows that a demotion is possible without the employee’s consent. In such a case, it is important to take into account a number of conditions, such as acceptance of the proposal can reasonably be required of the employee.
If the reason for a demotion lies in the employee’s poor performance, the employer must ensure that the reason is clear and comprehensible and can be substantiated. Furthermore, according to established case law, some additional requirements apply in the event of a demotion due to inadequate performance. If demotion is imposed as a sanction, it is important that there is a good basis for imposing the sanction. A well-formulated sanctions policy can offer an outcome. Little or no discussion is then possible.