Just how lawful is it to demote someone?
2 years ago
Our Industrial Court has defined a “demotion” as “the conferment upon an employee of a position to which is attached a lower remuneration or remuneration scale compared to the position held before the demotion”. See Dorothy Nchabira Bernard v Solution Sacco Society  eKLR and Gitau Harrison Joshua v Teachers Service Commission & another  eKLR.
Fair procedure: –
A unilateral decision to demote an employee amounts to an unfair labour practice contrary to Article 41 of the Constitution.
Section 10(2) of the Employment Act makes it mandatory for the employee’s position and job description to be provided in the employment contract.
Section 10(5) of the Employment Act makes it mandatory for an employer to consult an employee where there is any change to the particulars of employment.
In the post I did on unilateral changes to employment contracts (http://kenyaemploymentlaw.com//2016/03/16/are-unilateral-changes-to-an-employment-contract-legal/), I explained that a decision taken ‘in consultation with’ another is one that’s taken after a discussion with the other party about the thing that’s being decided. The employee does not need to agree with the employer but he/she should be heard.
Since a demotion results in changes to the job position, description, remuneration, among other things, consultation with the employee is necessary.
Court decisions: –
In Joel Njoroge Wanyoike v Teachers Service Commission (TSC) & 2 others  eKLR the court held that: –
“…procedural fairness in employment law … requires a party likely to be affected by a decision to be informed in advance”.
In Peter Kisilu Mutua v Panal Freighters Ltd  eKLR, the Claimant was demoted from a highway driver to a shunting driver and his salary slashed from 22,000/= to 15,000/= on grounds of restructuring. The court held that: –
“This was the wrong way to go about restructuring. It amounted to a unilateral variation of the terms and conditions of employment given in the letter of appointment. The unilateral change disadvantaged the Claimant. He was not consulted, and did not consent to have the inferior terms…This unilateral action by the Respondent falls in the category of unfair labour practices, and must therefore be corrected.”
In Ronald Kampa Lugaba v Kenol Kobil Limited  eKLR, before his termination, the Claimant was the business process analyst at Nairobi head office. He was demoted to a depot assistant and transferred to Eldoret. The Respondent wrote a letter to him cutting down his salary based on the new job portfolio from 210,600/= to 97,345 which was against the Respondent’s company policy which prohibited revision of salaries downwards. The court held that the reduction in salary and demotion was against Section 10(5) of the Employment Act. There was no consultation and there was no indication that it happened.
In David Nzue v Teachers Service Commission  eKLR the court held that: –
“Consequently, the Court finds that the Claimant’s redeployment from Kyaani Secondary School to Ikutha Boys Secondary School and then to Migwani Secondary School was a demotion effected on disciplinary grounds. This action was clearly taken without affording the Claimant a hearing as demanded by the rules of natural justice.”
For the demotion to be lawful, it should be carried out in accordance with the employer’s policies.
In Dorothy Nchabira Bernard v Solution Sacco Society  eKLR, the court held as follows in relation to a demotion that was not in compliance with the employer’s policies:-
“The 2nd issue for determination is whether the deployment amounted to a demotion. The said clause 19 of the Terms and Conditions of service provides as follows:
…Demotion can only be approved by the management.”
…the claimant’s remuneration reduced by Kshs. 4,000.00, the claimant was placed 2 grades below the previously held position, and the court finds that the deployment amounted to a demotion. The demotion was not approved by the management and the court finds that it was irregular and unfair. The deployment amounted to an irregular and unfair demotion.”
An employee who is aggrieved by a demotion should raise a grievance/complaint as soon as possible. Not taking any action could be taken as an acceptance of the change.
In Isaac Simiyu v Security Group (K) Limited & another  eKLR the court rejected the employee’s argument that the demotion was unlawful because there was no evidence that the employee had lodged any complaint on the demotion prior to the termination of his employment.
Finally, the Court of Appeal in CMC Aviation Limited v Mohammed Noor  eKLR rejected a similar argument by the claimant/employee. Though the reason for the rejection does not come out clearly, I believe the fact that the claimant signed a letter accepting the new position, raised no complaint and accepted the reduced pay and lower position and went on with his work for close to two years, was deemed an acceptance of the change.
Reduction in salary
A reduced pay is expected because of the change in position. However, where the employer’s policies prohibit reduction in salary , the employer is expected to comply. This was the case in the Kenol Kobil case cited above.
For a demotion to be lawful: –
- The employee should be consulted/given an opportunity to be heard; and
- The employer should comply with the provisions of its policies on demotion.
An employee aggrieved by a demotion should raise a grievance/complaint as soon as possible.
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