I would never demote my players - I see this as an admission of poor leadership skills. A good Archmage should train his / her players properly and use the NO REPLY update thread continually during a FA - then everyone knows what they are doing, and mistakes seldom happen.
If you cannot trust your players, then you have assembled a poor team...
Many Elvenar players come to the game to escape unpleasant realities like cancer, degenerative disease, bereavement, loneliness, depression and unemployment. For some sensitive souls it can be hurtful to be demoted, even if only temporary - no matter how nicely you do it.
That is why I never demote players - it is only a game. Some fellowships get totally carried away with FA which really only gives 'bragging rights' - the prizes at present are pathetic. It is quite possible to come in the top five with a minimum of fuss and disruption, if you have a strong team.