Labour courts and tribunals, such as the CCMA, encourage employers to be more creative in imposing penalties for misconduct and even incapacity and to use dismissal as a last resort. These penalties include demotion.
Here's what you need to do know to do this…
Demotion is when you make changes to your employee's terms and conditions of employment that result in the employee having a lower status, fewer powers and less responsibility. 'Demotion is generally coupled with a material reduction in remuneration, benefits and privileges that were associated with the previously held position,' the Labour Law for Managers Loose Leaf Service explains.
But, demotion isn't as simplistic as making changes to your employee's contract. You must do it fairly or your employee could take you to the CCMA and win.
Luckily, there are guidelines you can follow when you demote an employee for misconduct to avoid unfair labour practice claims.
Use these guidelines to demote an employee for misconduct
Follow all the procedural requirements for holding a fair disciplinary enquiry, including proper notification of the allegations, enough time to prepare for the hearing and other employee rights to representation.
Once your enquiry chairperson has found the employee guilty of an offence for which dismissal is the penalty as provided in your disciplinary code, the chairperson may use her discretion. She can tell the employer that he's been found guilty of a serious offence which would usually be punished with dismissal, but as an employer you're prepared to give him another chance. But, only if he accepts a demotion as an alternative sanction to dismissal.
You can do this if the nature of the misconduct or the circumstances of the offence or the personal circumstances of the employee justify a penalty short of dismissal.
If this is indeed a fair alternative, your employee may choose to be demoted rather than dismissed. However, it's important that should the guilty employee prefer demotion, 'he signs a document stating that by signing the document he confirms that he is willingly choosing demotion as an alternative to dismissal,' says the Loose Leaf.
Ensure you act fairly and don't break any labour laws when you demote an employee as a penalty for misconduct. By following these guidelines, you can ensure it's procedurally and substantively fair.