Employers and upper management must be careful when deciding to demote an employee. Illegally demoting or firing an employee can put the management or ownership team in court contesting a discrimination and/or illegal termination lawsuit. Demotion is a right any boss maintains - as long as it’s performed in a lawful manner. If done properly, you will be able to legally demote an employee without undue legal repercussions.
Determine a professional reason for demotion, such as failing to meet productivity levels. Document all of the employee's professional shortcomings as they relate to the matter at hand. Collect additional evidence, including progress reports or photographs that support your case for demotion. Confer with management and other executives on the matter and record minutes of this conference. Avoid demoting an employee for unsound or personal reasons to prevent a discrimination lawsuit.
Tell the employee of his demotion with calm and professional language. Provide a written statement detailing when the demotion will take effect and the specific reasons the demotion is warranted. Give the document to the employee as an additional means of communication on the matter, and so that they can have it for their records. Circulate a facsimile of the demotion letter to additional management and executives so all of the appropriate staff are aware of the demotion.
Allow the employee to appeal in front of you and a select board of management. Give the employee a chance to explain his side and produce any evidence or documentation to the contrary. Hear him or her out and discuss the matter openly and fairly. Explain any changes in salary and benefits issues with specificity so all terms and agreements on the new position are understood. Record the minutes of this meeting and save all documentation on the matter for your professional records.