If a demotion involves a significant reduction in duties or remuneration, it may constitute a 'dismissal', even if the person demoted remains employed by the employer.
The employment contract may be repudiated by the employer when an employee is demoted, without consent, and suffers a significant reduction in pay If the repudiation is accepted by the employee, either expressly or through conduct, the contract is terminated. If the demoted employee remains in employment after accepting the repudiation they would be under a new contract of employment.
However, a demoted employee may remain employed in the demoted position without agreeing to the demotion, that is, under protest or for financial or similar reasons.
If the employee's contract or industrial instrument contains an express term allowing demotion without termination then any demotion will not amount to a termination.
 A Gerrard v UPS Pty Ltd, PR944681 (AIRC, Eames C, 19 March 2004); Blair v Chubb Security Australia Pty Ltd, PR936527 (AIRC, Whelan C, 19 August 2003).
 Charlton v Eastern Australia Airlines Pty Limited, PR972773 (AIRCFB, Lawler VP, Blain DP, Gay C, 7 July 2006) at para. 34, [(2006) 154 IR 239].
 Charlton v Eastern Australia Airlines Pty Limited, PR972773 (AIRCFB, Lawler VP, Blain DP, Gay C, 7 July 2006) at para. 34, [(2006) 154 IR 239]; citing Advertiser Newspapers P/L v IRC of SA and Grivell  SASC 300 (23 July 1999) at paras 37–38, [(1999) 90 IR 211]; and Tokyo Network Computing Pty Ltd v Tanaka  NSWCA 263 (2 August 2004) at para. 6.
 Hermann v Qantas Airways Ltd, PR903096 (AIRC, Whelan C, 3 April 2001) at para. 88. See also Boo Hwa v Christmas Island Administration, Print S1443 (AIRC, Polites SDP, 2 December 1999) at para. 19 in relation to redeployment.