Employers are often faced with a scenario where an employee, who is due to be subjected to a disciplinary hearing, elects to resign with immediate effect. This has proven to be a contentious issue in the past, with many employers finding themselves forced into accepting resignations- particularly in instances where they would elect not to. Whilst Mzotsho v Standard Bank of SA (Pty) Ltd has provided clarity to employers who may wish to elect to refuse a resignation with immediate effect, this article looks at instances where employers accept a resignation and then find themselves hauled before the CCMA on allegations of constructive dismissal.

The Labour Relations Act 66 of 1995 (‘the LRA’) defines a constructive dismissal as an instance where ‘an employee terminated a contract of employment with or without notice because the employer made continued employment intolerable for the employee’. From the definition, it becomes clear that there are three (3) basic requirements for a claim of constructive dismissal to succeed, being;

  1. The employee has terminated employment with the employer;
  2. The reason for resignation was that continued employment was intolerable; and
  3. The employee’s employer must have been responsible for making continued employment intolerable.

The Labour Court in Gold One LTD v Madalani made it clear that intolerability is an incredibly high threshold and not one which merely noted difficult, unpleasant or stressful working environments or employment conditions. The Labour Court noted further that where an employee has reasonable alternate remedies available, the employee cannot complain that continued employment was rendered intolerable. The above was cited concurringly in O’Reilly v CCMA. The standard of proof which the Applicant must satisfy cannot, therefore, be arbitrary.

In Mvamelo v AMG Engineering an employee resigned with immediate effect after being informed that he would be disciplined for theft. After the employer accepted the employee’s resignation, the employee proceeded to the CCMA, where he alleged that he was constructively dismissed. The CCMA found that being subjected to disciplinary action did not constitute an intolerable working environment and that the Applicant had resigned merely to avoid disciplinary action.

Similarly, in Kynoch Fertilizers LTD v Webster an employee had resigned with immediate effect pending finalisation of disciplinary action for gross dishonesty. The employee referred a dispute of constructive dismissal to the CCMA thereafter on the basis that she was forced to resign due to intolerable working conditions. The Labour Appeal Court found that the acceptance of resignation from the employer constituted a settlement between employer and employee and that the employee could not rely on a claim of constructive dismissal in such a circumstance.

The above instances must be differentiated from examples where an employer takes impermissible steps whilst waiting for disciplinary action against an employee to be concluded, such as instances where an employer elects to withhold monies pending finalisation of a disciplinary enquiry or where an employer berates an employee publicly regarding allegations of misconduct. In such circumstances, it may be reasonable to conclude that continued employment was intolerable for an employee.

From the above, it is clear that our courts have set a daunting burden for employees to prove that they were constructively dismissed – and rightly so. Employers are reminded that they are not obliged to accept a resignation with immediate effect in instances where an employee has disciplinary action pending against them. Further, where an allegation of constructive dismissal is made, the former employee bears the onus of proving that continued employment was intolerable. Employers are encouraged to safely store all documentation which could be produced to show that an employee’s resignation was due to wishing to escape disciplinary action and not due to intolerable working conditions.

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Article by: Avishkar Singh
Dispute Resolution Official – Durban