Constructive dismissal occurs where the employee resigns and claims that the resignation occurred as a result of the employer’s intolerable conduct.

Unbearable or intolerable circumstances in this context can refer to a wide variety of acts on the employer’s part including the failure 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.

In order to convince an arbitrator or judge that unfair constructive dismissal has in fact taken place the employee must show that:

The employment circumstances are so intolerable that the employee could truly not continue to stay on

The unbearable circumstances were the cause of the resignation of the employee

There was no reasonable alternative at the time but for the employee to resign in order to escape the circumstances

The unbearable situation must have been caused by the employer intentionally or unintentionally

The employer must have been in control of the unbearable circumstances.

However, employers need to be very cautious in interpreting the meaning of these five tests. For example, test number 3, where the employee must show that he had no reasonable alternative but to resign must not be simplistically interpreted. For instance, it is often the case that the employee theoretically has the option of remaining in the employment relationship and 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. 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 while referring the unfair labour practice dispute.

Employees must be equally careful not to misinterpret the law. 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 who was informed of a disciplinary hearing for theft resigned and claimed constructive dismissal but lost the case because it was found by the arbitrator that he had resigned to avoid the disciplinary action.

However, where disciplinary steps have been taken unfairly and render the employment circumstances intolerable this can constitute constructive dismissal. For example, in Pretoria Society for the Care of the Retarded vs Loots (1997,  6 BLLR 721) the employer gave the employee a final warning for a number of offences and poor work performance. The Labour appeal Court found that this disciplinary action constituted constructive dismissal because the employer had “thrown the book” at the employee, 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 rands in compensation and legal costs.

To attend our 15 June seminar in Johannesburg on  OVERCOMING THE STRIKE MENACE please contact Ronni via ronni@labourlawadvice.co.za or 0845217492.

Written by Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 888-7944 or 0828522973 or on e-mail address: ivan@labourlawadvice.co.za. Go to: www.labourlawadvice.co.za.