Ask the expert: Can we demote rather than dismiss?

If an employee is struggling, can we demote rather than dismiss, and should we give them notice? Martin Brewer and Esther Smith advise.

The question: We want to demote rather than dismiss – but how?

We have an employee who has ended up on a final written warning follow two separate conduct issues. A further incident has arisen, which is also linked to capability. The next step for the conduct would have been to dismiss, but we wanted to give the person one final opportunity to work it out.

We and they believe that the promotion to supervisor some time ago has impacted on their ability to hit their targets. Therefore instead of dismissing, the disciplinary sanction was to demote (as allowed in our T&Cs). This will incur some loss of salary, but this should be gained back through hitting targets.

My question, do we need to give notice of the change in status and salary after the disciplinary or can it happen immediately? I can't find anything definite in the contract but feel we should, as had we dismissed, it would have been a dismissal with notice.