One of our employees was dismissed for a recurrence of misconduct and he appealed the decision. I have decided to uphold the employee’s appeal against the decision to dismiss him, and want to demote the employee instead. How do I handle it?

Lindsay Gibson writes:


(A) Is there a Contractual Right to Demote?

Generally speaking, when a decision is made to uphold an employee’s appeal and reinstate the employee, the employee’s dismissal will “vanish”. The employee will be treated as having been suspended for the period between their dismissal taking effect and the decision to reinstate them. The employee’s continuity of employment will not have been broken and will continue.

In respect of the decision to demote the employee, you will need to check whether there is a contractual right to substitute an alternative sanction to dismissal on appeal, which has automatic effect (i.e. does not require the employee’s consent). Such a contractual right would exist, if, for example, there is a provision in a contractual disciplinary procedure permitting an appeal manager to substitute an alternative sanction such as demotion, for that of dismissal. If there is a contractual right for an appeal manager to substitute the dismissal with a demotion, then the employment will continue in the demoted role. The employee would be entitled to receive back-pay for the period of suspension, i.e. from the original termination date until the date of reinstatement.

However, if the demotion is “grossly out of proportion to the offence”, then the employee may be entitled to refuse to take it, resign and claim constructive unfair dismissal.

(B) No Contractual Right to Demote?

If there is no contractual right to demote the employee, then you would need to obtain the employee’s agreement to the demotion instead of dismissal. If the employee does so agree to the demotion instead of dismissal, then the employee’s dismissal will “vanish”. The employee will be treated as having been suspended for the period between their original termination date and reinstatement, and he would be entitled to receive back-pay for such period of suspension.

The employee may not agree to return to the downgraded role. In such a case, it is likely that the offer of a downgraded role would be viewed as an offer to re-engage the employee on new terms of employment, and that the original decision to dismiss them will still stand. The employee could bring an unfair dismissal claim, and would have three months to lodge such a claim from the original dismissal date.

(C) Next Steps

You should now write to the employee, setting out your decision to uphold the employee’s appeal, subject to the employee returning to a demoted role (bearing in mind the legal position set out above). You should ensure that you clearly inform the employee of the date on which you expect him to return to work and his role, reporting structure, salary etc upon his return. You could also reassure the employee that he will receive back-pay for the period of time between the original date of termination and the return-to-work date, if he does so return as requested to begin working in the down-graded role.

If the employee fails to return to work on the date which is specified in this letter, you should try to contact him to ascertain what his intentions are. Any continuing absence may need to be dealt with as unauthorised absence under an absence management procedure, disciplinary procedure, or sickness policy, depending on the reasons for this.

Alternatively, depending on the factual circumstances, the employee may refuse to return to work in the demoted role, and the original decision to dismiss may stand.