On 17 August 2023, in the matter of Sanlam Life Insurance Ltd v Mogomatsi and Others the Labour Appeal Court (LAC) found that an employee who alleges constructive dismissal based on mental ill health must prove that the employer knew or ought to have known of the existence of the mental ill health and made continued employment intolerable.

The employee resigned from Sanlam’s employ and referred a constructive dismissal to the Commission for Conciliation, Mediation and Arbitration (CCMA). At conclusion of the arbitration proceedings, the commissioner had regard to all the incidents that the employee had referenced as the reason why he was of the view that the employer made continued employment intolerable and found that the employee failed to prove that he was constructively dismissed. He had in fact resigned. The commissioner therefore dismissed the case.

On review at the Labour Court, the employee alleged that the commissioner failed to consider relevant evidence, such as that he was given an ultimatum to apologise to his colleague or resign and that he was mentally ill at the time of his resignation.

The Labour Court found that no weight was given to the employee’s mental health during the arbitration and that, although the employer attempted to show that the employee’s conduct was unacceptable since October 2018, no mention was made of the employee’s anxiety and depression.

The Court further held that there was no evidence that the employer had considered an incapacity/ill health process rather than a disciplinary process in the run up to the employee’s resignation and that the approach of denying a common cause fact (i.e. the applicant’s mental ill-health), and of sweeping it under the carpet so to speak, continued at arbitration.

Finally, the Court held that on the evidence before the commissioner, the employee proved that the employment relationship became intolerable, and as such, the termination of the employment relationship should, on a correct assessment, have been found to be a constructive dismissal. The Court ordered the employer to pay the employee an amount equivalent to four months’ salary as compensation.

Grounds for appeal

Unhappy with the Labour Court decision, the employer approached the LAC. In the LAC, the employer argued that the employee’s mental health issue was not before the commissioner and that the court a quo therefore erred in deciding the matter on this basis.

The employer further contended that it was never called upon to meet a case of constructive dismissal based on it having made the employment relationship intolerable by not treating the employee with the necessary sensitivity. Further, the employer contended that the court a quo was called upon to decide whether the commissioner’s conclusion was correct based on the case and the totality of the evidence before her.

On the other hand, the employee contended that the court a quo decided the matter on the correct bases and pointed out that he submitted a medical certificate, after his resignation, which stated that he resigned because he had stress.

Findings of the Labour Appeal Court

At the onset, the LAC restated that in constructive dismissal disputes, a two-stage approach is normally followed. First, the employee must prove that the employer effectively dismissed them by making their continued employment intolerable.

This is an objective test in terms of which the employee need not prove that they had no choice but to resign, but that the employer made continued employment intolerable. The conduct of the employer towards the employee and the cumulative impact thereof must be such that, viewed objectively, the employee could not reasonably be expected to cope with it. Second, after the dismissal has been established, the court will then evaluate whether the dismissal was unfair.

The LAC held that since the matter pertained to a constructive dismissal, the facts of the case must point to the employer having been aware or having ought to have been aware of the mental distress of the employee. Only if an employer is aware of an employee’s psychiatric illness and is indifferent or insensitive to it, thereby making continued employment intolerable, might a proper case for constructive dismissal be established.

The Court stated that an employer must always be vigilant and act sensitively when it becomes aware or ought to be aware of a particular susceptibility or vulnerability of an employee. In a case where the employee claims constructive dismissal based on psychiatric ill health, the employee must, therefore, prove that the employer was aware or ought to have been aware of the employee’s psychiatric ill health.

In upholding the employer’s appeal, the Court held that the issue of mental ill health was not common cause and that no evidence of such mental ill health had been raised at arbitration whatsoever. Even when the employee took his last sick leave, he said that he had the flu and not that he was suffering from stress or anxiety. It was only after his resignation that the medical practitioner certified that the employee had resigned due to stress.

Key takeaways

When an employer becomes aware of an employee’s mental ill health it must be vigilant and deal with such employee sensitively. This includes taking into account an employee’s known mental ill health in deciding how to deal with issues of performance and misconduct. Where appropriate, an employer may need to consider an incapacity for ill health process.

If an employee resigns and alleges that they have been constructively dismissed while suffering from mental ill health, such employee would have to prove that the employer knew or ought to have known of the employee’s mental ill health.

Written by Yonela Sicam, Senior Associate, Bowmans South Africa