A Fair Demotion

Section 186(2) of the Labour Relations Act provides that an unfair demotion may constitute an unfair labour practice: in this case, there is no termination of service (dismissal), and the employee is placed in a more junior level compared to the post he or she occupied. In some (exceptional) cases, demotion is seen as an alternative to dismissal: the employee is given a choice to either accept a demotion or to face dismissal. Given the relative health of the employment relationship, an employee may well choose to remain employed, albeit in a lower post.

Not every demotion will be unfair, in spite of there being a widely held view to this effect. The recently reported CCMA award in TOWU obo Malan / Commuter Handling Services (Pty) Ltd (2005) 15 CCMA 10.10.2 illustrates how a demotion, in the context of an employee’s poor work performance, may be appropriate instead of a dismissal. The employee concerned had been promoted from loadmaster to the more senior position of apron superintendent in 2004; in 2005, he was demoted back to the position he held prior to his promotion.

The employee had some of the skills necessary to perform the functions as apron superintend, but his planning, rostering and decision-making skills left something to be desired. His time-keeping was atrocious. He did not display the leadership and authority required of his new position. At times, it almost seemed that he was negligent. But this is where the problem lay: was it his lack of skill or negligent or a combination of both that presented the employer with difficulties?

This award makes for interesting reading: for the commissioner it made no sense to say that, on the one hand, an employee’s poor work performance justifies dismissal, but, on the other hand, to say that the employer is not allowed to unilaterally demote the employee. In an economic climate such as ours, where many people are unemployed, the commissioner found it commendable that the employer would retain the employee in his service rather than dismiss him — as the employer would have been entitled to do in this case. Employers, the commissioner continued, should not be discouraged from demoting employees rather than dismissing them.

The employee raised the argument that the employer’s disciplinary code did not provide for demotion. The commissioner, correctly, reiterated that a disciplinary code and procedure is not a rigid document cast in stone for all eternity, and, from a policy perspective, added that it would be a sorry day if an employer is compelled to dismiss an employee simply because the disciplinary code and procedure did not provide for a demotion.

But a demotion, in a case such as this, must be both substantively and procedurally fair, and the CCMA commissioner considered each of these aspects in some detail. On the facts of the case, the commissioner concluded that the employee had indeed not reached the required performance standard and that the performance standard set by the employer was a reasonable one. The demotion was substantively justified in this case. The demotion was also procedurally fair: the employee had been given a fair hearing before his demotion, and his allegations that the chairperson was biased were groundless.

An interesting decision, made more so by the approach taken by the CCMA commissioner — an approach that is sound and rational. It is not necessarily the case that an employee must be dismissed: dismissal will not, in every case, be appropriate. If an employee performed well in a position, but fails to get the job done after being promoted, there may well be good reasons to demote the employee back to the position he initially occupied.