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Demotion
Last updated May 2026
This chapter explains when and how you can demote an employee, and how to avoid the associated legal risks.
When can you lawfully demote an employee?
Definition: Demotion
A demotion is when some action by the employer results in a decrease in the employee’s grade or role.
A demotion is when some action by the employer results in a decrease in the employee’s grade or role.
The demotion will expose the employer to legal risk unless it is:
- made with the employee’s consent or agreement (read more); or
- authorised by law, i.e. the employment contract, legislation, award or enterprise agreement (read more).
Demotion with employee consent
Important: Where the demotion is made with the consent or agreement of the employee, you are unlikely to attract legal risk.