By Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 888-7944 or 0828522973 or on e-mail address: ivan@labourlawadvice.co.za. Go to: www.labourlawvideos.co.za
Demotion is often an acceptable legal alternative to dismissal, especially where the trust relationship has not been destroyed and the infraction relates to irresponsible behaviour.
Regardless of the circumstances employers are advised to take the law into account before implementing a demotion. This is because, should the CCMA or bargaining council find the demotion to be unfair the arbitrator has the right to reinstate the employee into the position from which he/she was demoted with full backpay.
For example, in the case of Mavimbela vs Sterikleen (Pty) Ltd (2006, 11 BALR 1128) the employee had been a cleaner. He was later asked to carry out supervisory duties but, after failing to carry out these duties properly, he was relegated to being a cleaner. He therefore lodged a dispute at the CCMA for unfair demotion. The employer said that the employee had never been promoted but rather had been asked to carry out limited supervisory duties in return for receiving an allowance.
However, the arbitrator found that the employer had failed to prove that the employee had in fact performed poorly. He found therefore that the employer had acted unfairly and ordered the employer to pay the employee compensation equal to eight months’ of the extra managerial ‘bonus” granted when he was given the supervisory duties.
In the case of Nyaka, Tlaka and Thangi vs Limpopo Department of Transport (Lex Info 20 October 2025. Labour Court case number JR1770/23) the employees were demoted after they had allegedly confessed to consuming alcohol on duty. At arbitration they testified that they had been tricked into making the confession. Despite this the arbitrator upheld the fairness of the demotions.
However, the Labour Court found that the arbitrator had failed to apply the law correctly by accepting the alleged confession. The Court also faulted the arbitrator for accepting hearsay evidence and for ignoring testimony from a witness of the employer to the effect that the three employees had not been consuming alcohol. Prior to making this finding the Court had ruled that the employer’s opposition to the employee’s review application had been both late and devoid of an argument for prospects of success. The Court therefore ruled that the employees’ review application was being treated as unopposed.
In summary, the employer made fatal errors both in its demotion of the three employees despite the lack of evidence as to their guilt and in its bungling of its opposition to the review. The Court ordered the employer to reinstate the each of the three employees with backpay for a period of almost three years.
In the light of the above case decisions employers should neither implement demotion nor deal with review applications before training their decision makers in the complexities of labour law.
The innovative video series WALKING THE LABOUR LAW TIGHTROPE assists employers to provide their managers with very inexpensive training that allows the managers to achieve necessary knowhow at times suitable to their very busy schedules. Its 48 chapters, averaging 10 minutes in length each, can easily be watched at junctures when the manager has time. This greatly informative yet very engaging and practical video series provides crucial and user-friendly learning through the use of a stimulating, animated case study that runs throughout the 48-chapter series. Each chapter contains clear and important advice needed by workplace management on the basics of labour law over a very wide range of topics.
A further advantage is that the manager can, for a full year, easily go back to any of the 48 videos for purposes of refresher training or in order to access information on how to deal with a current workplace issue. This solves the problem of managers forgetting what they have learned.
This video series helps management to walk the shaky labour law tightrope and to run the workplace productively without falling into the labour law abyss.
To access our groundbreaking video series: WALKING THE NEW LABOUR LAW TIGHTROPE please go to www.labourlawvideos.co.za or contact Ivan on ivan@labourlawadvice.co.za
