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  1. #1
    Join Date
    Feb 2012

    Default Demonting Employee


    Does anyone have any experience in demotions? What should I look out for and is it even acceptable in the eyes of the Fair Work Act?

    We have some managers that are not performing and we'd like to demote and adjust salary downwards to match.
    I'm thinking is it redundancy (although position remains) or is there warnings letters required first etc etc?


  2. #2
    Join Date
    Apr 2012


    Under the Fair Work Act, you can not change (or as you say "demote") an employee's employment status without their agreement. You would have a conversation, and if they agree, issue an amended employment contract. However, I'd suggest you've got buckleys in getting agreement here. Who in their right mind would accept a lower job on lower pay for no real reason other than someone thinks they are not performing!!! Be very careful.

    And you are right unless it is a genuine redundancy, then it is not redundancy. If the business is not eliminating the jobs these "some managers" are doing, then you can't get rid of them that way.

    The only option is to Performance Manage said employees ie you put them on a PIP (Performance Improvement Plan) which needs to show what is not being done to standard, how you want it done and a timeline on when improvement must be made and sustained. With the first meeting, if the person has never been spoken to before about his performance, you should begin the disciplinary process by issuing a First Written Warning. If improvement doesn't occur or falls away again, then issue a Final Written Warning, being sure to make clear that failure to perform to standards may lead to termination of employment.

    I have to ask however, just what has the business done to get these managers over the line? If nothing, then you need to tread carefully as to fairness. If they have had lots of coaching, training, mentoring and help from time they went into the roles, then that is a different story. How long have these managers worked for the company? If you are a small business (less than 15 employees) then you are protected from unfair dismissal for 12 months, but only six months if you have 15 or more employees.

    In conclusion, demotion/salary reduction is NOT acceptable and you do so at your peril (risking penalty fines). The Fair Work website will have sample warning letters etc you can access.
    With any luck, you might just find one or more just quit rather than be performance managed but whatever you do, do not suggest they resign.

  3. #3
    Join Date
    Feb 2012


    Thanks Tiger, for very thorough advise.
    I feared it was not acceptable to reduce salary without employee approval.

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