Constructive dismissal - think before you do

There has been an increasing trend of employees challenging managerial decisions they disagree with, especially when it concerns issues relating to their performance or conduct. Grievances and complaints relating to victimisation or harassment are becoming more and more prevalent, and we also see how this often lead to (actual or threatened) constructive dismissal claims. But what does such a dispute really entail and what are the requirements for a successful claim?

Introduction

Everyone involved in employment law will agree that there are always two sides to consider in workplace conflict situations. Employers may (justifiably) become frustrated with the conduct or performance of some employees who, instead of taking accountability or responsibility for their duties as an employee, choose to play the victim and turn everything onto the employer. Inasmuch as this may be happening, there is however also no doubt that on the other end of the scale we find some employers who care naught for their employees, for fairness or for any form of due process, and would do exactly as they please.

The focus of this article is on the legal remedy of constructive dismissal and what the rights and obligations of the parties to the employment relationship are in this regard.

Legal context

The concept of constructive dismissal has been codified into our labour law as a recognised statutory dismissal ground by way of s186(e) of the Labour Relations Act (1996), namely “when an employee terminates their employment (with or without notice) because the employer made continued employment intolerable for the employee”.

Our courts have been clear that the existence of constructive dismissal (or not) is a jurisdictional fact which must be considered and determined objectively. A resignation is not a dismissal – and if no (deemed) dismissal is established, the CCMA does not have jurisdiction to determine the dispute. This also widens the scope of a review of this type of matter beyond the mere reasonableness of the outcome, due to the jurisdictional issue having to be determined de novo by the reviewing court. [Shoprite Checkers (Pty) Ltd v Nkosi and Others (2022) 43 ILJ 1386 (LC); Solid Doors (Pty) Ltd v Commissioner Theron and Others (2004) 25 ILJ 2337 (LAC); Mnguti v CCMA and Others (2015) 36 ILJ 3111 (LC); Celestine Bosch v JDG Group (Pty) Ltd (JR578/14) [2021] ZALCJHB 171]

There are several important aspects that differentiate the pursuit of an actual unfair dismissal claim (where the employer terminates the employment relationship) from an unfair constructive dismissal claim (which is initiated by the employee’s actions). Let’s unpack these.

Onus of proof

In terms of S192 of the Labour Relations Act, the onus of proof in dismissal disputes is split as follows: (1) the employee must establish the existence of the dismissal if this is disputed; (2) if this has been successfully done, the employer must then show that it was fair [Sanlam Life Insurance Ltd v Mogomatsi and Others (CA 12/2022) [2023] ZALAC 15].

In the case of constructive dismissal, which is triggered by the employee’s resignation, this means that the employee first has to establish that the resignation amounted to a deemed dismissal in terms of s186(e) before anything else can be decided. The employee therefore has to start leading their evidence, not the employer, and needs to discharge their onus by showing that, whilst they had terminated the employment contract by resigning, the resignation would not have happened had it not been for the employer’s wrongful conduct which caused the employee’s continued employment to become intolerable. Only if all of these requirements are established on a prima facie basis, does it fall within the statutory definition for this type of dismissal.

If successful in establishing the existence of a (deemed) dismissal, the employer may nevertheless in response be able to show that this was not unfair – for example by showing that the employee’s action of resigning was unreasonable, or that the employer did not act wrongfully or cannot be blamed for the intolerability.

All of these aspects must be proved on a balance of probabilities, and the test is an objective one, based on reasonableness. [Eagleton v You Asked Services (Pty) Ltd (2009) 30 ILJ 320 (LC)]

Elements / Test for Constructive Dismissal

As explained above, there are various hurdles to be jumped by an employee who wishes to successfully claim that their resignation effectively amounted to a dismissal. These requirements have been clarified and refined by various courts over the years – the basis of which as set out in Solid Doors (Pty) Ltd v Commissioner Theron and Others (2004) 25 ILJ 2337 (LAC).

1. Firstly, the employee must have resigned (terminated the employment relationship) in order to trigger a potential claim for constructive dismissal.

2. The reason for the resignation must have been as the result of the employer’s wrongful conduct which caused an intolerable working relationship for the employee and a breakdown in the employment relationship.

This element of wrongfulness / culpability was addressed by the SCA in Murray c Minister of Defence [2008] ZASCA 44, where it was pointed out that he employer may not have had control over what makes conditions intolerable and even if the employer was responsible, it may not be to blame, as there are many things an employer may fairly and reasonably do that may make an employee’s position intolerable. More is needed, said the court - the employer must be found to have been culpably responsible in some way for the intolerable conditions.

Culpability does however not necessarily mean providing proof that the employer had wanted to get rid of the employee, but it must be shown that the employer acted "without reasonable and proper cause, conducted itself in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence between employer and employee." [Pretoria Society for the Care of the Retarded v. Loots [1997] 6 BLLR 721 (LAC)] The court’s function is to examine the employer’s conduct as a whole and determine whether its effect, judged reasonably and sensibly, is such that the employee could not have been expected to put up with it. [Asara Wine Estate and Hotel (Pty) Ltd v Van Rooyen and Others (2011) ZALCCT 21, relying upon the LAC’s reasoning in SA Rugby Players Association and Others (2008) 29 ILJ 2218 (LAC].

3. There must also be a nexus between the employer’s conduct and the resignation – i.e. it must be established that there was no other motive for the resignation, but for the continued unacceptable conduct of the employer. [Pretoria Society for the Care of the Retarded v. Loots; Victory Parade Trading 227 (Pty) Ltd t/a Omega Selection v Carelse and Others (C282/2019) [2022] ZALCCT 19]

4. Then, the issue of intolerability as complained of by the employee, needs to be evaluated. This requires a high threshold and the onus to prove such intolerability rests with the employee. Importantly, this is an objective test – not merely based on the subjective experience of the employee. [Victory Parade Trading 227 (Pty) Ltd t/a Omega Selection v Carelse and Others [2022] ZALCCT 19] The conduct of the employer and the impact thereof must therefore be such that any reasonable person would not have coped, but resigned due to the ensuing intolerability [National Health Laboratory Service v Yona and Others (2015) 36 ILJ 2259 (LAC)]. In South Africa, the ‘reasonable person’ test does however allow for some flexibility, depending on the circumstances of each case, so some subjective aspects may be taken into consideration.

Over the years, the courts have been quite clear that typical workplace conflicts will not qualify as ‘intolerable’. Just because an environment is difficult to work in, does not make it intolerable.

• In Old Mutual Group Schemes v Dreyer and Another [1999] ZALAC 50, the LAC stated that an employee should not be allowed to rely on the fact that certain rules which applies to all employees, but that frustrates, irritates or do not suit him/her, as the basis for a claim of constructive dismissal.

• The Constitutional Court in Booi v Amathole District Municipality and Others (2022) 43 ILJ 91 (CC) held that intolerability ‘implies a level of unbearability, and must surely require more than the suggestion that the relationship is difficult, fraught or even sour’.

• In Shoprite Checkers (Pty) Ltd v Nkosi and Others (2022) 43 ILJ 1386 (LC) it was held that an employee’s repeated grievances based on dissatisfaction with the trajectory of his career or the lack of progression therein, which culminated in his resignation, did not constitute constructive dismissal.

• In Celestine Bosch v JDG Group (Pty) Ltd (JR578/14) [2021] ZALCJHB 171 the employee alleged that her line manager was rude, sarcastic, aggressive and abusive, which made her continued employment intolerable. The line manager, in turn, attributed the disgruntled employee’s complaints to the employee’s poor performance and her unjustified need to receive constant positive reinforcement. The complaints lodged by the employee were made in direct correlation to her not achieving the required performance standards and being subjected to counselling – some of these apparently opportunistically lodged to pre-empt further performance management in an attempt to conceal her inadequate performance. The Labour Court found that the employee had failed to prove constructive dismissal and concluded that “… intolerability is a high threshold, far more than just a difficult, unpleasant or stressful working environment or employment conditions, or for that matter an obnoxious, rude and uncompromising superior who may treat employees badly. Put otherwise, intolerability entails an unendurable or agonizing circumstance marked by the conduct of the employer that must have brought the employee’s tolerance to the breaking point”.

5. The employee must lastly demonstrate that other possible resolutions to the intolerable situation have been explored before taking the decision to resign. Although resignation need not have been a last resort, the facts of the case must point to the employer having been aware of the situation. [Sanlam Life Insurance Ltd v Mogomatsi and Others (CA 12/2022) [2023] ZALAC 15]

The employer can really only be held culpably responsible if it had been aware of the situation and was given the opportunity to address it - so an employee will have to show compelling reasons why they failed or refused to follow available internal procedures prior to resignation. Merely stating, for example, that they had no confidence in the mployer’s grievance process, will not be sufficient. [Foschini Group v CCMA and Others (2008) 29 ILJ 1515 (LC)]

In Johnson v Rajah NO and Others [2017] ZALCJHB 25 the court held that, “….an employer should be made aware of the alleged intolerable conditions and be afforded an opportunity to address and rectify it. An employee cannot merely resign and claim constructive dismissal while other options are available and as I already alluded to the test is whether a reasonable alternative existed. An employee cannot resign without affording the employer an opportunity to rectify the causes of his or her complaints and successfully claim constructive dismissal.”

In Albany Bakeries Ltd v Van Wyk & others (2005) 26 ILJ 2142 (LAC) the Labour Appeal Court observed that, “…..from the very concept of intolerability one must conclude that it does not exist if there is a practical or legal solution to the allegedly oppressive conduct” and that “….it might well smack of opportunism for an employee to leave when he alleges that life is intolerable but there is a perfectly legitimate avenue open to alleviate his distress and solve his problem”. [See also Bandat v De Kock and Another (2015) 36 ILJ 979 (LC).]

In the recent case of Sanlam Life Insurance Ltd v Mogomatsi and Others (CA 12/2022) [2023] ZALAC 15 the employee raised the issue of his mental health issues for the first time on review to the Labour Court – nothing about this had been disclosed to his employer, nor at arbitration during the initial constructive dismissal dispute. The Labour Appeal Court found that the employee must prove that the employer knew or ought to have known about his medical condition. Apparent misconduct / attitude problems and disciplinary action taken by the employer to address these, cannot constitute constructive dismissal based on intolerance for the employee’s mental health, if this was not known to the employer. If an employer is however aware of an employee’s psychiatric illness and through its indifference or insensitivity towards this is making continued employment intolerable, a proper case for constructive dismissal might possibly be established. Importantly however – the court said that there was no duty on the employer to invoke an incapacity process if this is not raised by the employee.

Conclusion

The threshold to prove a constructive dismissal is justifiably high in order to prevent abuse by opportunistic employees who feels aggrieved by their employer's general conduct or who wishes to escape from dealing with incompatibility, misconduct or incapacity under the guise of constructive dismissal. As much as employees are entitled to a safe working environment and the right to be treated with dignity and respect, we have seen that a mere unpleasant or stressful working environment does not equate to intolerability, and employees should use the normal (internal or external) remedies available to them to address such issues, before resorting to such a drastic step.

Resignation brings the employment relationship to an end, with no guarantee of compensation, and very few constructive dismissal cases succeed at the CCMA. Substantively, there are significant legal hurdles to overcome to meet all the requirements; and the procedural steps involved are also more difficult for the employee. However, unlike dismissals for misconduct or incapacity, legal representation is automatically allowed in constructive dismissal disputes at the CCMA.

In a case where a claim for constructive dismissal does succeed, compensation is generally awarded to return the employee to the financial position they would have been in had the dismissal not occurred. Reinstatement is seldom on the table in cases of constructive dismissal, due to the damage to the trust relationship between the parties and the employee not wishing to return to the workplace.

© Judith Griessel