Demotion is said to exist when there is a reduction in:
Generally, demotion is allowed as a valid exercise of management prerogative, often as a consequence of an employee’s failure to comply with company productivity standards. (Leonardo vs. NLRC, June 16, 2000 and Fuerte vs. Aquino, June 16, 2000)
Due Process Requirement.
While an employer may demote an employee for valid reasons, it must first comply with the twin requirements of notice and hearing. This is because a demotion affects the employment of an employee, whose right to continued employment under the same terms and conditions, is likewise protected by law. (Floren Hotel vs. NLRC, May 6, 2005) Demotion, like dismissal or termination from employment, is in the nature of a punitive action, which an employee should be given a chance to contest.