When Can an Employer Demote an Employee?
Unilateral job changes: what is allowed under Dutch employment law?
In a ruling dated 6 April 2023, the Subdistrict Court of Oost-Brabant assessed a case that often arises in employment relationships: under what circumstances may an employer demote an employee without their consent? In this case, the employer decided to demote a staff member after a workplace incident—but the court disagreed. The judgment highlights that demotion is only permitted under strict conditions.
The background: early departure and sudden demotion
The employee had been working for a fruit and vegetable wholesaler since 2016. Over the years, she had progressed from production worker to “supervisor plus.” On 6 August 2022, she left work two hours early without permission, after her request to do so had been denied. According to the employer, this disrupted the production process and followed years of alleged underperformance. As a result, the employer demoted her back to a production worker role, along with a reduced salary.
The employee contested the decision. She argued that the demotion was unjustified and handled carelessly. She had, in fact, received multiple promotions in recent years and was not structurally underperforming. She also claimed there was a valid reason for her early departure: an urgent car issue that required immediate garage service. She stated that she had properly handed over her tasks before leaving. The case ended up before the court.
The legal framework: Article 7:613 of the Dutch Civil Code and fair employment practices
The court assessed whether the employer was entitled to unilaterally change the employee’s role under the employment contract's amendment clause. Such a clause is legally valid but can only be invoked when the employer has a compelling interest that outweighs the employee’s. This requirement stems from Article 7:613 of the Dutch Civil Code. In addition, the general principle of being a fair employer applies.
In this case, the court ruled that there was no sufficiently compelling interest to justify the demotion. Although the employer claimed that the employee had underperformed for years, he failed to provide convincing evidence. On the contrary, the employee had received promotions in the years leading up to the incident, contradicting the claim of long-term dysfunction. Moreover, no improvement plan had been initiated or even announced, despite that being expected in such cases. An employee should only face such a severe measure as demotion after being given a fair opportunity to improve.
The demotion was disproportionate
Although the incident on 6 August 2022 could be blamed on the employee, since it was busy and she left without approval, the court found that this alone did not justify a demotion. There was no proof that the production process had been seriously disrupted. The court held that the employer could have considered less drastic measures, such as a formal warning or a temporary sanction. A permanent change to job role and salary was deemed excessive.
The employer also argued that the employee might regain her position in the future if she proved herself again. But the court found this unconvincing. Reducing someone’s role first and only offering a chance to recover later is inconsistent with the principles of fair employment.
Reinstatement and back pay granted
The court largely ruled in favour of the employee. The employer was ordered to reinstate her to her previous position as “supervisor plus” within one week and to pay her the salary arrears retroactively, including benefits and statutory interest. A penalty was imposed for each day the employer failed to comply. In addition, the statutory increase for late wage payment was partly granted.
The court emphasized that careful decision-making is crucial, especially when core employment conditions like job role and pay are at stake. Without a proper improvement plan and clear communication about the consequences, a job change is legally vulnerable.
Conclusion
Demotion is a severe measure and is only legally justified in exceptional cases. This ruling makes it clear that employers must first act with care, initiate an improvement process, and be able to prove actual issues. Only when those conditions are met and the employer’s interests outweigh the employee’s can a demotion be upheld. Demoting an employee without clear justification, even after an incident, will not stand up in court.
Employers facing underperformance or workplace conflicts are advised to seek timely legal counsel. Employees should also be aware of their rights when employment terms are being changed.
This blog was written by Mr. Stijn Blom
Employment law attorney at expatlawyer.nl B.V. Stijn has extensive experience in employment law and supports entrepreneurs on a daily basis with a wide range of employment law issues. From dismissal cases to drafting watertight agreements and regulations – with his practical and personal approach, he helps employers and employees move forward. Want to know more? Visit Stijn’s page.
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June 2025
