How to Draft a Demotion Agreement and Avoid Common Pitfalls

Understanding Job Demotion Agreements

In employment contracts, the job description outlines the set of tasks that an employee is contractually obligated to perform.
The tasks assigned by the employer at the time of hiring can later be modified during the employment relationship.
These modifications can be upward (assigning superior tasks) or downward (known as “demotion”).

Among the various scenarios of demotion provided by the law, one is determined by mutual agreement between the parties, according to Article 2103, paragraph 6, of the Civil Code.
This article, amended by Legislative Decree No.
81 of June 15, 2015, allows employers and employees to reach an agreement to change the job duties, legal category, job level, and compensation in a negative manner.
Such changes are only permissible if justified by the employee’s interests, aimed at:

• Preserving employment;
• Gaining new skills;
• Improving life conditions.

The most common scenario involves an agreement made to prevent an employee’s dismissal, often due to the elimination of their job position.
In this context, the employee’s primary interest in job security can justify a move to lower-level tasks and associated pay decrease.

How to Draft a Demotion Agreement Correctly

The agreement should start with the title “Modification Agreement of Duties,” clearly stating its purpose.

Next, include the date and location of the agreement along with the parties present: the employer’s legal representative, an assisting professional, the employee, and possibly a union representative.

Ensure that the document accurately describes the employee’s current position, including their duties, job level, legal category, and salary.

The core of the agreement should explain the reasons for the demotion, underscoring that it is intended to preserve the employee’s job, making it clear how it impacts their duties and salary.

The parties must agree to the new responsibilities and any changes to job classification and pay effective from a specified date, while any changes to working hours should be outlined in a separate agreement.

It’s also crucial to state that despite the modifications, the employment relationship remains continuous.
The employee retains their accumulated seniority, crucial for future rights such as social security access and contractual protections.

In the conclusion, both parties must acknowledge that the new contractual framework aligns with the assigned duties.

Finally, the validity of the agreement relies on signatures from both the employer and employee, alongside optional confirmations from any assisting professionals or union representatives.

Is Notification to UniLav Necessary?

Demotion agreements do not require notification to public authorities through the “UniLav” telematic model.
However, all parties should retain signed original copies of the agreement for their records.