Can your employer demote you?

When demotion is allowed under your contract

Some contracts contain an express clause allowing the employer to alter job duties or move the employee to a lower role. If so, the employer may be entitled to demote you within the limits of that clause. However, such clauses are interpreted narrowly, and any changes must still be reasonable.

Demotion as an alternative to dismissal

In disciplinary situations, demotion may be offered as an alternative to dismissal. This typically follows a formal disciplinary hearing, and should only occur if the employer has followed a fair process and demotion is proportionate to the misconduct.

Disciplinary demotion following misconduct or performance issues

Where performance or conduct is in question, an employer may impose a demotion as a disciplinary sanction. This must be done fairly, following the employer’s disciplinary policy and the ACAS Code of Practice. Without a proper process, the demotion could amount to a breach of contract.

Is demotion lawful?

Checking your employment contract or handbook

Whether a demotion is lawful often depends on your contract. If the contract includes flexibility clauses about role or duties, these must still be exercised reasonably. You should check:

• Any clauses about role changes
• Pay and benefits terms
• References to policies or collective agreements

Implied terms and custom and practice

Even where a contract is silent on demotion, employers are bound by implied terms of mutual trust and confidence. A sudden, unexplained demotion could breach this obligation. Similarly, if your employer has never previously used demotion, introducing it without discussion may be unlawful.

Demotion without consent – is it a breach of contract?

If there is no contractual right to demote you and you have not consented, the change may amount to a breach of contract. This can entitle you to:

• Reject the change and continue under the original terms
• Treat the contract as terminated and claim constructive dismissal
• Pursue a legal claim for breach of contract or unlawful deduction from wages

What are your rights if you are demoted?

Refusing a demotion – what are the risks?

You may choose to refuse a demotion, particularly if it affects your pay or working conditions. However, refusal may carry risks, including dismissal. If you are considering this route, seek legal advice before taking action.

The right to raise a grievance

If you believe a demotion is unfair, discriminatory, or procedurally flawed, you can raise a formal grievance. This is often the first step in resolving the issue internally before considering legal action.

Demotion and constructive dismissal – when can you resign and claim?

A demotion that significantly changes your role or pay, imposed without your consent, may justify resignation and a claim for constructive dismissal. To succeed, you must show that your employer committed a fundamental breach of contract and that you resigned in response to that breach.

Pay, status and other impacts of demotion

Can your employer reduce your pay?

A pay reduction following demotion is only lawful if:

• Your contract permits it, or
• You have agreed to the change, or
• It forms part of a lawful disciplinary sanction following a fair process

Otherwise, it could amount to an unlawful deduction from wages or breach of contract.

Changes to job title, responsibilities, and working conditions

Demotion may also involve:

• A less prestigious job title
• Reduced decision-making authority
• Changes in reporting lines
• Fewer benefits or professional development opportunities

These changes can impact your career progression and job satisfaction. If they are imposed without consent, they may be challengeable.

Emotional and professional consequences of demotion

Being demoted can affect confidence, morale, and future employment prospects. It is important to assess the impact both practically and emotionally before accepting or challenging a demotion.

Demotion and discrimination

Could demotion be discriminatory?

Demotion decisions must not be based on a protected characteristic under the Equality Act 2010, including:

• Age
• Sex
• Disability
• Race
• Religion or belief
• Sexual orientation
• Pregnancy or maternity
• Gender reassignment

For example, demoting an employee returning from maternity leave without justification may be discriminatory.

Examples of potentially unlawful demotion decisions

Unlawful demotion could include:

• Penalising an employee for raising a grievance
• Targeting older workers for lesser roles
• Demoting a disabled employee without reasonable adjustments

If you suspect discrimination, it is important to act promptly and seek advice.

When to seek legal advice

You should seek legal advice if:

• You believe the demotion is discriminatory
• You are unsure whether your contract allows the change
• You are considering resigning and claiming constructive dismissal

Options for challenging a demotion

Using internal procedures

Start by reviewing internal policies and submitting a formal grievance. Keep a written record of events and communications. Many demotion disputes can be resolved at this stage.

Negotiating a settlement

If a dispute cannot be resolved internally, your solicitor may be able to negotiate a settlement agreement. This could include compensation for the demotion or an exit package.

Making a claim at an employment tribunal

If the matter remains unresolved, you may be able to bring a tribunal claim. Potential claims include:

• Constructive dismissal
• Unlawful deduction from wages
• Discrimination
• Breach of contract

Strict time limits apply (usually three months less one day from the date of the act), so early legal advice is crucial.

When to get legal advice

If you are asked to accept a demotion

Before agreeing to a demotion, especially if it affects pay or conditions, get legal advice. This will help you understand your rights and any risks involved.

If demotion has already taken effect

Even if the change has already occurred, it may still be possible to challenge it—especially if you did not consent or it was imposed unfairly.

If you are considering resignation and a claim for constructive dismissal

Constructive dismissal claims are complex and risky. Before resigning, speak to an employment solicitor to assess the strength of your claim and explore all available options.