Constructive dismissal is a statutory form of dismissal which is defined by Section 186 (1)(e) of the Labour Relations Act (LRA), as the termination of the contract of employment by the employee with or without notice due to the fact that the employer had made the continued employment relationship intolerable for the employee.
The following is required to prove that a constructive dismissal has indeed taken place:
- An employment relationship must exist at the time the employee leaves the employer’s service;
- The employee must have brought the employment relationship to an end. However, formal resignation is not always necessary, and dismissal can be proved where the employee has left their employment in a circumstance that would otherwise have amounted to desertion.
- The employee must prove that it would have been intolerable to remain in employment due to the employer’s conduct;
- That there was a causal nexus (link) between the employer’s conduct and the circumstances that caused the employee to resign.
- The employers conduct occurred prior to resignation.
When considering a claim of constructive dismissal, one may pose the question as to how ‘intolerable’ the continued employment would be to provide the employee with no alternative but to terminate the employment relationship. All that is required is that the employer behaved in a deliberately oppressive manner and left the employee with no other option but to resign.
In Smithkline Beecham (Pty) Ltd v CCMA & Others (2000) 21 ILJ 988 (C), the court held that the test as to whether the prospect of continued employment would remain intolerable is an objective one and therefore constructive dismissal cannot be determined from the state of mind of the employee alone. The circumstances leading to the employee’s resignation must also be considered.
The examples of the employer’s conduct which are generally accepted to render the continued employment relationship intolerable are not exhaustive. General examples of conduct which have been accepted by the courts and arbitrators founding claims for constructive dismissal include:
- demotions coupled with threats of dismissal if the employee did not accept such demotion;
- unlawful deductions from an employee’s salary;
- a salary restructuring that resulted in a substantial increase in the employee’s tax deductions;
- offer of an alternative position at a greatly reduced salary;
- sexual harassment and other forms of harassment;
- unjustified disciplinary action;
- denial of company transport;
- assaulting an employee in front of colleagues and exerting undue pressure on the employee to resign.
The employee must show that they were subject to coercion, duress or undue influence.
In the Pretoria Society matter, referred to in (Johnson v Rajah (2017) ZALCJHB), the Labour Appeal Court held that when an employee claims constructive dismissal, they are essentially saying that he or she would have continued working indefinitely had the employer not created an unbearable situation. As such, the employee resigns because he or she does not believe that the employer will ever reform or abandon the pattern of creating an unbearable work environment. Should the employer be able to prove that the employee’s fears were unfounded, it will be held that the employee was not constructively dismissed but simply resigned.
The above paragraph indicates that the employee should make use of a grievance procedure to alert the employer to the misconduct. Should such a grievance be filed, the employer should do their utmost to remove the employee’s cause of complaint. The courts and arbitrators must consider whether a grievance was filed.
Constructive dismissal is not in all cases unfair, however, should constructive dismissal be proved the onus rests on the employer to prove that he or she did not act unfairly. The workplace can be a stressful environment which can be strenuous on the employer and employee relationship. Should an employer be faced with a situation where an argument has taken place, and the employee has as a result elected to resign, the employer should ensure that prior to accepting such resignation, persons are available to witness the resignation. Thus, should the employer be faced with a claim of constructive dismissal, the employer will have witnesses to provide evidence to oppose such a claim. The keeping of employee records and documentary proof is equally important.
We would advise that for further queries regarding constructive dismissals, you contact your nearest Consolidated Employers Organisation offices for further advice and/or assistance.
Dispute Resolution Official – East London