By Ivan Israelstam, chief executive of Labour Law Management Consulting
Constructive dismissal is a special and unique brand of dismissal under labour law. Its uniqueness lies in the fact that it is the only type of dismissal that is not implemented via the employer telling the employee to leave the employer’s employ. That is, with constructive dismissal, the employee resigns and claims that the resignation occurred as a result of the employer’s intolerable conduct.
In order to convince an arbitrator or judge that unfair constructive dismissal has in fact taken place the employee must show that:
1. The employment circumstances are so intolerable that the employee could truly not continue to stay on
2. The unbearable circumstances were the cause of the resignation of the employee
3. There was no reasonable alternative at the time but for the employee to resign in order to escape the circumstances
4. The unbearable situation must have been caused by the employer intentionally or unintentionally
5. The employer must have been in control of the unbearable circumstances.
Unbearable circumstances in this context can refer to a wide variety of acts or omissions on the employer’s part and could include, amongst others, failing to pay the employee, verbal or physical assault, sexual or other harassment, victimization, scapegoating, unfair demotion, unjustified unilateral changes in employment conditions or unfair discipline.
It is often the case that the aggrieved employee theoretically has, instead of resigning, the option of remaining in the employment relationship and of referring an unfair labour practice to the CCMA or other tribunal. Where the employee fails to do so and resigns instead, this will not always mean that he has failed test number 3 above. Passing this test will depend a great deal on whether, under the circumstances at the time, the employee could reasonably have been expected to stay on in the employer’s employ for purposes of referring the unfair labour practice dispute.
Employees must be equally careful not to misinterpret the law. Where, for example, an employer notifies an employee of a disciplinary hearing this could genuinely be seen as unbearable to the employee. However, a resignation by the employee for purposes of avoiding the disciplinary hearing is unlikely to constitute unfair constructive dismissal.
For example in the case of Mvamelo vs AMG Engineeering (2003,11 BALR 1294) the employee was informed that he was to be called to a disciplinary hearing for theft and that criminal charges would also be laid. He resigned and claimed constructive dismissal but lost the case because it was found by the arbitrator that he had resigned to avoid the disciplinary steps of which he had been notified.
However, where disciplinary steps have been taken unfairly and this renders the employment circumstances intolerable this can constitute constructive dismissal. In the case of the Pretoria Society for the Care of the Retarded vs Loots (1997, 6 BLLR 721) the employer had given the employee a final warning for a number of alleged offences. The Labour appeal Court found that this disciplinary action constituted constructive dismissal because the employer had found her guilty of things for which she could not be held responsible and had humiliated her.
Employers need to be extremely careful that they do not discipline employees unfairly. Otherwise the employer might have to pay tens of thousands of rand in compensation and legal costs.