No idea how deep some RP's go, but in real life, entire companies close, employees get laid off/fired.
That would technically mean entire group demotions. 
Ahh yes, I guess you could use it for that, but I was thinking more like:
1. You just got caught doing the wrong thing on your job, instead of getting banned for hours an admin can just demote you, and someone else would probably take the job.
or 2. An admin finds an AFK, instead of banning/kicking you could demote him.
But I guess I would probably kick an afk, depending on how long they've been afk for.