What is constructive dismissal?

Provided by Arnold Law - Legal Consultancy

By Fadia Arnold

Topics Dispute Resolution | Labour Law

26 Nov 2020

Introduction

Constructive Dismissal is defined in the Labour Relations Act 66 of 1995 (hereinafter referred to as “the Act”) as: “an employee terminated a contract of employment with or without notice because the employer made continued employment intolerable for the employee”. From the definition, one will immediately note that for a Constructive Dismissal to occur, the employee would have needed to terminate the contract of employment by resignation.

Resignation by the Employee

An Employee would need to terminate the contract of employment by terminating the employment relationship via resignation in order for the Act to apply. Further, the reason for resignation must be that the Employer made continued employment intolerable for the Employee.

What constitutes “intolerable” employment?

For a Constructive Dismissal to occur, the Employer must have created an intolerable working environment to the extent that the Employee has no alternative but to resign. Examples of an Employer making continued employment intolerable for an Employee could include, amongst others, assault, sexual harassment, failure to pay the Employee’s salary, humiliating Employees in the presence of other Employees and victimizing or bullying an Employee. Despite these examples having separate claims in their own right, they can too, and often do form the basis of a Constructive Dismissal claim.

Elements required to prove a Constructive Dismissal claim

The Commission for Conciliation, Mediation and Arbitration (hereinafter referred to as “the CCMA”) has provided an in-depth information sheet on its website www.ccma.org.za setting out the elements which an Employee would need to prove in order to be successful in claiming Constructive Dismissal at the CCMA. An Employee will have to prove the following at the CCMA, on a balance of probabilities, in order to be successful in a Constructive Dismissal claim:

that the contract of employment was terminated by the Employee because of the Employer’s conduct and not for any other reason;
that the reason for the termination of the contract was that continued employment became intolerable for the Employee; and
that it must have been the Employer of that Employee who made the continued employment intolerable.

Internal Grievance Procedures

Employees tend to struggle to prove Constructive Dismissal claims at the CCMA in circumstances where they did not exhaust all internal avenues in respect of grievance procedures and policies set in place by the Employer for Employee complaints or lodging of grievances by Employees. The CCMA has similarly advised that an Employee needs to show they had attempted to resolve the intolerable situation prior to resigning. Of course, this is not always possible in small businesses or workplace environments where there is no Human Resources Department. Furthermore, it must be noted that the intolerable situation may be one event, such as sexual harassment or assault, or a number of events that have taken place over a period of time, such as public humiliation.

Referring Constructive Dismissal Disputes to the CCMA

Employees are often not aware of the timeframe provided by law within which to lodge a Constructive Dismissal claim with the CCMA and that most importantly if the timeframe is missed, the Employee will have to apply for condonation for the late referral, the result of which may mean that the Employee’s claim might be rejected. To avoid a situation where an Employee’s claim is rejected due to being out of time, the Employee must refer the Constructive Dismissal dispute to the CCMA within 30 (thirty) days of the date of resignation of the Employee.

Conclusion

Should an Employee be successful at the CCMA in proving a Constructive Dismissal occurred, the Commissioner who arbitrated the dispute may award the Employee up to 12 (twelve) months compensation.