Search Business Insights

Business Directory

Explore Our Directory Of Certified Business Partners

16 May
2017

Constructive Dismissal: A Regularly Misunderstood & often Abused Concept


Constructive-Dismissal---DJJ-Lemmer

Introduction:

As one of most regularly misunderstood concepts in South African labour law, claims of constructive dismissal often leads to lengthy and costly litigation. On the one hand, many employees seem to believe that the concept offers a paved way to “riches” in the form of a handsome award from the CCMA or other appropriate forum. On the other hand, employers are often restricted in doing “the right thing” for their business for fear of such a claim.

Employees often contact us, describing a set of circumstances and the inevitable question whether they can consequently claim a constructive dismissal as a result? Employers on the other hand, unjustifiable fear asking certain questions or taking certain actions, because of the same concept.

The following quote from the Labour Appeal Court decision of Jordaan v CCMA & others (2010) 12 BLLR 1235 (LAC) at 1239, illustrates part of the problem:

“With an employment relationship, considerable levels of irritation, frustration and tension inevitably occur over a long period. None of these problems suffice to justify constructive dismissal. An employee, such as the appellant, must provide evidence to justify that the relationship has indeed become so intolerable that no reasonable option, save for termination is available to her.”

By looking at established and recent case law and textbooks on the subject, we hope to clarify some of the misconceptions which exist in this regard.

The statutory nature of this kind of dismissal:

Grogan (Workplace Law – Second Impression 2015) describes constructive dismissal as a form of statutory dismissal. This kind of dismissal is however also recognised by common law – see Mafamane v Rustenburg Platinum Mines Ltd (2003) 10 BLLR 999 (LC) & also A van Niekerk & N Smit (Managing Editors). Law@Work. p. 232.

Section 186(1) of the Labour Relations Act deals with the meaning of “dismissal” and in sub-section (e) states:

“Dismissal means that:

(e) an employee terminated a contract of employment with or without notice because the employer made continued employment intolerable for the employee”.

What makes this type of dismissal peculiar?

The employee, rather than the employer, ends the contract with or without notice, in contrast to the usual situation where a dismissal entails a decision by the employer. The “dismissal” thus occurs at the initiative of the employee, but the termination is nevertheless regarded as a dismissal because of actions or omissions on the side of the employer which rendered the employment relationship “intolerable” and thus “forced” the termination.

Requirements:

Generally, what needs to be proven by the employee is that the employer made continued employment intolerable. In other words, the employee resigned because he is of the view that the conduct of the employer was such that he had no option but to resign.

The following are critical issues involving claims for constructive dismissal:

  • Was there an employment relationship?
  • Whether the employee brought the contract to an end;
  • Whether the reason for the employee’s action was that the employer had rendered the prospect of continued employment “intolerable”;
  • Whether the employee had no reasonable alternative other than terminating the contract.

We will deal with each of these requirements in more detail below:

Was there an employment relationship?

This requirement is clear and speaks for itself. An employment relationship must exist at the time the employee leaves the service of the employer.

Where for instance, the employee refused to sign a new contract of employment and “resigned” after the employer stopped his salary, the court refused his claim for constructive dismissal because the employment relationship had already ended – see Member of Executive Council, Department of Health, Eastern Cape v Odendaal & others (2009) 30 ILJ 2093 (LC).

Whether the employee brought the contract to an end:

Under “normal” circumstances a termination by an employee would constitute either a resignation or a breach by the employee. Since neither constitutes a dismissal, statutory intervention was required to “make” resignation by an employee, a specific form of dismissal.

Formal resignation by the employee, is clearly sufficient. Although not specifically specified anywhere, it is unlikely that an employee who resigns by giving notice in terms of the applicable legislation or his contract, would be successful in proving a claim of constructive dismissal.

It is however also accepted that simply leaving your employment may sometimes be regarded as a termination.

The reason for the termination:

The employee carries the onus to prove the reason for termination. It is necessary for the employee to have genuinely believed that the employer had rendered the continuation of the employment relationship “intolerable”.

The mere subjective belief of the employee is not good enough, the belief also has to be reasonable. The employee furthermore has to prove that the employer was in fact responsible for creating the conditions that induced the belief. Grogan, (Workplace Law. Second Impression 2016.11th edition. P. 176) states that employees who claim constructive dismissal must generally show that they were subjected to coercion, duress or undue influence. Mere unhappiness at work is not enough.

The test is thus partly subjective (perceptions of the employee) and partly objective (circumstances in which the termination took place). Grogan elaborates on this requirement and states that it need not be shown that the employer has repudiated the contract, what needs to be proven is that the employer “behaved in a deliberately oppressive manner and left the employee with no option but to resign in order to protect his or her interests”.

In the matter of “Pretoria Society for the Care of the Retarded v Loots” the court described this test as follows:

When an employee resigns or terminates the contract as a result of constructive dismissal such employee is in fact indicating that the situation has become so unbearable that the employee cannot fulfil what is the employee’s most important function, namely, to work The employee is in effect saying that he or she would have carried on working indefinitely had the unbearable situation not been created. She does so on the basis that she does not believe that the employer will ever reform or abandon the pattern of creating an unbearable work environment. If she is wrong in this assumption and the employer proves that her fears were unfounded then she has not been constructively dismissed and her conduct proves that she has in fact resigned”.

Mere belief of the intolerability is not good enough, the court or arbitrator has to be satisfied that at the time of termination of the contract, the employee was under the genuine impression that their employer has actually behaved in a manner which made them believe that the relationship had been rendered intolerable and would continue to do so.

The employee also has to prove that the belief was reasonable.

  • Were the circumstances which induced the belief, such that it justified the claim;
  • That the circumstances actually existed.

It follows that there has to be as casual nexus between the actions of the employer and the decision to resign.

Whether the employee had no reasonable alternative other than terminating the employment:

Whether there were other alternatives, and if so, whether those alternatives were reasonable, is a question of degree.

Where the complaint is such that the employer could, and probably would have dealt with the cause of the unhappiness, the employee should file a complaint first before resigning. Where employees have failed to file a grievance, or lodge a complaint, they are unlikely to persuade arbitrators that they were constructively dismissed.

Grogan is of the view that the lodging of an internal grievance is not required “if it is clear that management is irredeemably prejudiced against the employee”.

The situation brought about by the actions of the employer, must have induced the employee to resign. This speaks for itself.

The employee has to show that it would have been “intolerable” for him or her to remain in employment.

In the matter of Asara Wine Estate and Hotel (Pty) Ltd v Van Rooyen and Others (2012) 33 ILJ 363 (LC), the Court considered the authorities and held that where a reasonable alternative to resignation exists, it cannot be said that the employer made continued employment intolerable for the employee.

In Kruger v Commission for Conciliation, Mediation and Arbitration and Another (2002) 23 ILJ 2069 (LC) the employee did not follow a grievance procedure as she believed that the grievance procedure was no longer an option. The Court found that employees should not second guess the outcome of lodging a complaint in terms of the employer’s grievance procedure, especially not where the employee is contemplating resignation coupled with an allegation of constructive dismissal and such employee had never raised the issue with the employer before.

In Albany Bakeries Ltd v Van Wyk and Other (2005) 26 ILJ 2142 (LAC) the Labour Appeal Court effectively took the view that an employee should make use of alternative remedies. This would obviously include an internal grievance procedure.

Onus:

Once the employee has proven that constructive dismissal occurred, the onus shifts to the employer to prove that it did not act unfairly.

A constructive dismissal is not inherently unfair and a court or other forum, will then have to determine whether the employer’s conduct was justified. Compensation may be reduced where it is found that the employee contributed to the creation of the conditions of which he or she is complaining.

Appropriate relief:

For obvious reasons, reinstatement is usually not granted in the event of a claim of constructive dismissal. It is nevertheless possible where the circumstances which made the employment intolerable no longer exists.

Conclusion:

Employees will firstly be well advised to seek proper legal advice before resigning from their jobs in the heat of the moment. Courts have generally not been very sympathetic to applicants in constructive dismissal matters unless they have fully complied with the requirements.

Employers on the other hand, should ensure that they are aware of the requirements set by the law and should, for instance, not be loath to try and negotiate a mutual separation agreement with a problem employee without being unduly concerned about a claim for constructive dismissal.

We submit that, as is the case with many disputes in South African labour law, employers can reach their objectives by following the right procedures and complying with the requirements laid down by the law.


If you are looking for top notch short courses to expand your knowledge, look no further. 

Making the right connections is vital to the growth of your business. With our network, its as easy as one, two, three…

Business Travel is becoming more and more of a necessity. Find out how not to break the bank and still be ready for take off.

 



Related Service Providers:

DJJ Lemmer Labour Relations


Related Articles:

Generation Z: What Companies Need to Know

  10 things you need to know about Generation Z employees Generation Z is the term for people born in the mid-1990s and early 2000s, a generation of young people which is now coming to maturity and entering the workplace.


Overcoming the Inefficiencies of Traditional Communication Channels

  Corporate LAN Advertising Most organizations, across all sectors, are often faced with the same difficulties when communicating internally with their staff. These difficulties are increased when the national / global footprint of the business is extended and the number


The age of intelligent data analytics

Find out how you can use your data-analysis to benefit you Starting a conversation about business will inherently bring up topics about analytics, big data and, of course, business intelligence. Data has become one of the most important concepts in



Generation Z: What Companies Need to Know

By Sage HR and Payroll 0 comment(s)

How to improve your business relationship

By Tarina Meiring 0 comment(s)


Intervertebral Disc Disease in Dogs (IVDD)

By Animal Health and Hydro 0 comment(s)