Some initial contextualisation regarding the concept constructive dismissal:
Conventionally, dismissal, within work related context, is an act performed by the employer as part of its prerogative to enforce discipline.
Constructive dismissal is a form of dismissal which developed over time providing a remedy for employees falling victim to unscrupulous employers who want to get rid of an employee, but who do not want to follow the prescribed procedure – they want to rather make use of the employee’s contractual mechanism to exit the employment contract, namely resignation, in order to attain their goal.
The outward appearance of a constructive dismissal is invariably that of a resignation by the employee, but the true nature of it is a veiled dismissal by the employer.
In the case: Murray v Minister of Defence (2008), a judge in the Supreme Court of Appeal (SCA) very aptly called constructive dismissal a victory for the concept: substance over form. It is not the outward appearance (the “form”) which defines what you are dealing with, but its true nature (the “substance”).
Before constructive dismissal was legally recognised as a form of dismissal, it already was a quite common practice amongst employers. Since no one realised or comprehended the unfairness associated with what was later termed constructive dismissal at the time, it was apparently the way in which some “quick fix” dismissals were carried out.
I remember, as a child, overhearing the grown-ups discussing how someone was sacked. The news of the intended dismissal was apparently conveyed by the manager using words such as: “I want your resignation on my desk tomorrow”. A classic example of constructive dismissal.
Today, it still happens that the unwanted employee’s resignation is cunningly “organised” to be put on the manager’s desk, but just far more subtly, and when this opportunistic ploy of the employer is eventually exposed, it now carries the label: constructive dismissal.
Every employment contract should provide for an escape clause which the parties can resort to in order to terminate the contract, should they so wish. This escape clause is usually worded as follows: “Either party may terminate this contract by giving the following written notice to the other party…”.
While the employee may exercise this right by merely giving the required notice (with no obligation to furnish any reason for exercising this right), the employer has to have an acceptable reason for exercising this right and has to follow the prescribed procedure.
In essence, constructive dismissal is the employer using the employee’s contractual escape mechanism for its own means and objective.
The jurisdictional dilemma
The CCMA is a creature of statute. It does not have inherent jurisdiction and derives its jurisdiction from a proper referral of a case. For a referral to be proper, a prescribed process must be followed, with the observance of time limitations. Substantively, the subject matter of the case being referred to it must fit into the CCMA’s statutory authority and mandate.
A termination of employment occasioned by a genuine resignation (a unilateral uncontested act performed by the employee) cannot be entertained by the CCMA, as the latter will simply lack the required jurisdiction.
It is here where a claimed constructive dismissal faces its very first hurdle to overcome.
On face value, The CCMA would lack jurisdiction to entertain a claim of constructive dismissal, as the matter is “clothed” as a resignation. It is also a common defence of the employer party, opposing the claim of constructive dismissal, to raise a point in limine arguing that the CCMA lacks jurisdiction.
Central to whether the CCMA had the required jurisdiction to entertain a constructive dismissal dispute or not, is determining the true nature of the dispute.
It may happen that the Labour Court is later required to ascertain the true nature of the dispute during a review process. To be able to do this, the Labour Court has to have access to what transpired at the conciliation proceedings regarding the nature of the dispute, but then, conciliation proceedings are conducted on an off the record and without prejudice basis, effectively putting the lid on what transpired at conciliation.
The Constitutional Court (CC) resolved this apparent obstacle to uncovering the true nature of the dispute in the case: Theo September, Dean September, Roland Paulsen v CMI Business Enterprises CC (2018) by pronouncing as follows:
- The true nature of a dispute subjected to conciliation proceedings is not privileged information.
- The particular complexity of the concept of constructive dismissal makes it conceivable that non-lawyers may not always formulate the dispute correctly, thereby not reflecting the true nature of the dispute, hence necessitating subsequent legal scrutiny.
In a normal unfair dismissal dispute, the employee must factually prove the existence of the termination of employment, where after the onus moves to the employer to prove that the dismissal was not unfair.
In a constructive dismissal case, the employee has much more to substantiate in order to give credence to the claim of constructive dismissal.
In this regard the Labour Appeal Court (LAC) laid the following prerequisites at the employee’s door in the case: Solid Doors (Pty) Ltd v Commissioner J P Theron N.O., CCMA & Grant Clapton (2004):
- Proving that the employment contract was terminated by the employee; and
- Proving that the reason for terminating the contract in this way, was that continued employment became intolerable for the employee; and
- Proving that the employer, through its conduct, made continued employment intolerable.
Once the employee has proven the above sufficiently, the termination of the employment assumes the status of a dismissal (constructively, as it were) and the onus shifts to the employer to prove that such dismissal was not unfair. This then also vests the CCMA with the required jurisdiction to entertain the matter.
Assessment of intolerability
Proving that the employment contract was terminated by the employee is the easy part. All that is required in this regard is to simply submit the resignation letter.
Proving that the employer’s conduct made continued employment intolerable is however not so easy and many claims of constructive dismissal fail in this particular regard.
The LAC in the case: Pretoria Society of the Care of the Retarded v Loots (1997) laid down certain principles and considerations regarding this particular aspect:
- Apart from the conduct of the employer having made continued employment intolerable, the employee should not have had any intention to terminate the employment contract and would have carried on working indefinitely.
- Evaluating the employer’s conduct as a whole, it has to be such that the employee could not reasonably be expected to put up with it.
- The conduct of the employer must have caused the employee not reasonably being able to do what the employment contract obliges him/her to do, namely, to work.
- When terminating the employment contract, the employee must have had the firm belief that the employer will not reform and abandon its unbearable pattern of conduct.
- There must not have been a reasonable alternative to resignation in order to remedy the conduct of the employer.
The latter aspect is however quite controversial as some schools of thought regard whether the employee had a choice other than resorting to resignation to address the intolerable situation as not essential to prove constructive dismissal. What this viewpoint regard as essential to prove constructive dismissal, is that the employer made continued employment intolerable.
This viewpoint was confirmed in the Constitutional Court case: Strategic Liquor Services v Mvumbi N.O. & others (2009).
In my opinion, this does not necessarily do away with having to reasonably exhausted the available internal procedures to address the employer’s conduct prior to it reaching the stage of intolerability. Resigning should remain a measure of last resort.
The specific context of the matter before the CC in the above citation is however important in that upon one client complaining about the employee, the latter was offered the option to resign with a month’s notice and a good reference, or to be issued with a written warning and be placed on a performance improvement programme.
No objective investigation of the credibility of the allegations against the employee was carried out. Instead, the customer’s complaint was accepted to be true at face value. The employee was then offered an exit that would deprive him of legally contesting the termination of his employment contract, alternatively, keeping him in employment, but putting him on terms, which does not rule out at least an incapacity dismissal in the foreseeable future. That, in itself, constitutes an intolerable situation with no fair choice for the employee to make.
Admittedly, following the internal grievance procedure to address the employer’s conduct, may not be reasonably possible in all instances. In a small business where executive management is either involved, justifiably not regarded as unbiased or is associated with the conduct of the employer at issue, following a grievance route will not be appropriate.
Once, despite reasonable endeavours to preserve the employment relationship, the intolerability of the employer’s conduct is objectively established, it would no longer matter whether the employee had a choice other than to resign, which, in my opinion, underscores the viewpoint expressed in the above-mentioned CC case.
The intolerability should also be confirmed by the conduct of the employee in the circumstances. Some elements of irrationality and acting out of character will usually accentuate the fact that the employee was forced out of employment.
Resignation with immediate effect, not adhering to the contractual notice period and doing so without having secured alternative employment, are factors which normally would support the level of intolerability which necessitated the employee’s hasty exit from employment.
One could for instance equate the resignation within constructive dismissal context with a pilot using the ejection seat to leave a fatally ailing aircraft rather than to attempt an emergency landing.
In the case decided by the Supreme Court of Appeal (SCA), namely: The President of RSA v Reinecke (2015) it was emphasised that the intolerable behaviour had at least to have been perpetrated by someone who had the authority to dismiss. If not, it could cast serious doubt on the motivation of the employee’s decision to terminate his/her services in the way he/she did.
Bringing it all together
Constructive dismissal is, arguably, one of the most vexed concepts when dealing with disputes concerning the termination of the employment contract.
There is also no shortage of relevant case law dealing with constructive dismissal and I just touched on some of the salient ones in this blog.
For the employee to succeed with a claim of constructive dismissal, apart from proving that the termination of the employment contract happened on the instance of the employee, it is crucially important to prove that the employer made the continuation of the employment contract intolerable to the extent that an expeditious and even impulsive exit from employment became unavoidable and that no internal remedies could reasonably have averted the eventual resignation.
For the employer to stay clear from successfully being accused of constructive dismissal, a working environment must be cultivated and maintained where employees are empowered to perform optimally within their respective jobs, while the employer should resort to utilising the legitimate tools to its disposal to address persistent non-conformance to required standards (behavioural and performance) in a fair and equitable way.
Never resort to underhanded tactics such as clandestinely, but intentionally setting employees up for failure, unduly pressurising or intimidating employees to the point of them throwing in the proverbial towel and resigning in an abrupt and irrational way.
Preserve the employment relationship you have with your employees to the benefit of both the employee and the organisation for as long as reasonably possible. When dismissal becomes inevitable, execute it in a transparent, calculated, procedurally and substantively fair manner, taking due responsibility for the eventual termination of the employment contract.
Do not endeavour to disguise a dismissal as a secretly “engineered” resignation, thinking that it will make life easier for you. As the saying goes: “If the shortcut was the best way to travel, the main road would have gone that way”.
Author: Lara Burton – MHA, CPHR, SHRM-CP
