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Resign or Fight
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I can't see there is much you can do about a poor manager ( unless he is actually treating you unfairly and different to everyone else) Most of us either have one or have had one at some stage.
So were you actually officially demoted? Have you been given a different role in the organisation? If so, why? It must have been explained?
Or did other people doing the same job get a rise and you didn't? That could possibly be unfair but depends if its based on performance / length of service etc.0
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