How do demotions work in the Catholic Church?

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In this particular case the word demotion is misleading. Better word would be transfer. It might be seen as a demotion for an outsider, but in reality it is not. He is still a Cardinal and a Bishop. You have to separate the Catholic Church's spiritual hierarchy from its functional hierarchy. Within functional hierarchy, heading the roman curia is to help the pope in his work. A cardinal has to do what the pope wants him to do. Every Cardinal vow obedience to the pope. They know that such a thing can happen.

Are they unilateral decisions from the Pope?

Theoretically it is an unilateral decisions of the Pope. But practically it is done by the pope after consulting other Cardinals and bishops.

Is there some other established methodology for determining status in the Church?

By status if you mean becoming a Priest, Bishop, Cardinal or a Pope, then yes, there is. This video gives you a rough outline of that procedure. Remember Holy Orders leaves an indelible mark on the soul, Hence once a priest always a priest (Even in Hell).

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RORATE CÆLI reprinted BuzzFeed News' transcript of the section of the interview wherein Cardinal Burke talked about leaving the Signatura.

BuzzFeed News (BFN): Have you been told that you will be transferred?

Cardinal Burke (CB): Yes.

BFN: You're obviously a very well-respected person. That must be disappointing.

CB: Well, I have to say, the area in which I work is an area for which I'm prepared and I've tried to give very good service. I very much have enjoyed and have been happy to give this service, so it is a disappointment to leave it.

On the other hand, in the church as priests, we always have to be ready to accept whatever assignment we're given. And so I trust that by accepting this assignment, I trust that God will bless me, and that's what's in the end most important. And even though I would have liked to have continued to work in the Apostolic Signatura, I'll give myself to whatever is the new work that I'm assigned to...

Even though the article heading started with "Burke confirms: Yes, Pope has demoted me." the transcript shows, as @JayarathinaMadharasan has answered, that it was a transfer that many consider a demotion.

What is important to note is the spirit and response of Cardinal Burke and it is good to repeat it again with emphasis:

On the other hand, in the church as priests, we always have to be ready to accept whatever assignment we're given. And so I trust that by accepting this assignment, I trust that God will bless me, and that's what's in the end most important. And even though I would have liked to have continued to work in the Apostolic Signatura, I'll give myself to whatever is the new work that I'm assigned to...

He is practicing and living what Jesus taught:

"But whoever would be great among you must be your servant, 27 and whoever would be first among you must be your slave; 28 even as the Son of man came not to be served but to serve, and to give his life as a ransom for many.” - cf. Matt 20:20-28.

Endnote

It is good to end by noting that the "transfer and movement of clergy" as was the case of priests in the Catholic Church sexual abuse scandal or when dealing with Emmanuel Milingo [ he was eventually laicized] and Marcial Maciel Degollado or Pope Paul VI's January 4, 1976 abrupt assignment of Annibale Bugnini to a minor Vatican diplomatic post as pro-nuncio to Iran, while to the outsiders they may appear [with some truth] to be demotions or disciplinary, from the Church's perspective, they are for the "good of the Church and its faithful".

Upvote:2

A very specific characteristic of the Eastern penalty is the demotion of a cleric to a lower grade. According to CCEO c. 1433 Β§1,

a cleric demoted to lower grade is prohibited from exercising those acts of the power of orders or governance that are not consonant with this grade.

The cleric in this penalty retains his grade of ordination, but only allows to exercise those acts of the power of orders or of governance which are in accordance with the lower grade to which he is demoted, i.e., of a priest or a deacon.

Therefore, a priest who is demoted to the grade of a deacon is not allowed to place the acts proper to the sacerdotal grade but is allowed to function as a deacon. The same is also applicable to the Bishops. This norm is not found in the Latin Canon law, hence it is not to be applied to the Latin church.

The Eastern Code does not mention any of the delicts for which this penalty can be given. Nevertheless, wherever an appropriate penalty is prescribed, the authority can inflict this penalty on the clerics who committed a serious crime.

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