Does an "unhappy" manager ever have the right to demote?

Chelsea manager, Jose Mourinho, has reportedly demoted team doctor, Eva Carneiro after reacting to her running on to the pitch at the beckoning of the referee to treat a player, leaving Chelsea with only eight outfield players in the final minutes of their game against Swansea on Saturday. After the match Mourinho stated “I was unhappy with my medical staff. They were impulsive and naïve…”. However, Dr Carneiro reportedly angered Mourinho further with a subsequent facebook post thanking “the general public for their overwhelming support” – a post which itself has received mix reaction from commentators regarding whether she was right to do so or was in fact unprofessional in using a public forum in relation to an employment related matter. Press reports are that Dr Carneiro has now been axed from training sessions, games and the players’ hotel. Rumours are also circulating that an “internal staffing matter” was already in play.

Is a demotion ever fair?

Demoting an employee to an ostensibly more junior position or removing responsibilities when things start to go wrong is on the face of it an attractive option for employers – it removes the immediate problem but avoids the tricky and perhaps lengthy process of undertaking a disciplinary or performance process and potentially terminating employment. However, UK employment law does not make it easy, recognising that such a move significantly undermines the relationship of trust and confidence underpinning every employment relationship. An employee’s employment contract will set out their duties and responsibilities. Whilst it is common for the employment contract to build in a right for those duties and responsibilities to change, this is usually subject to the requirement that they must be commensurate with the employee’s seniority. So a demotion or a change of duties that essentially send a signal that the employee is being treated as more junior, will be a clear breach of contract.

There are employers who may be in a stronger position to make such a change. Some employers have an express right in the employment contract to essentially demote an employee in particular circumstances. However, even if this is so, doing so unreasonably – such as on impulse and without investigation – will still in many cases amount to a fundamental breach of the implied term of trust and confidence entitling an employee to resign and claim damages for breach of contract. The stakes are even higher where an employee has two years’ or more employment and can claim unfair dismissal where compensation may be up to 12 months’ salary or £78,335 whichever is lower. Employers should also bear in mind whether there are any potential discrimination issues. Should an employee be able to successfully claim that the actions taken against him or her were on the basis of a protected characteristic, such as their sex, race or age, compensation may be awarded for injury to feelings and their financial losses without limit.

We have seen demotions used as the outcome of a disciplinary process – but in our experience this is rare and is usually only successful where the disciplinary process expressly allows such a right and/or the employee has expressly agreed to it. Indeed, employers must remain alert to the fact that simply putting a proposal, which is essentially a demotion, to the employee may in itself be a breach of trust and confidence. Any proposed demotion, whether as part of a disciplinary or performance process or otherwise, must therefore be handled with care.

Leaving aside the press frenzy on what may or may not be behind the actions taken in relation to Dr Carneiro’s future role with Chelsea and indeed, whether the publicity surrounding her employment relationship could have been avoided in the first place and raises its own trust and confidence issues, does an unhappy manager ever have the right to demote an employee? Our simple answer is yes he may but only in very limited circumstances and after careful consideration of all the factors influencing that decision.