Constructive Dismissal – An ER/IR Conundrum

 

Introduction

  I refer to constructive dismissal as a “conundrum” for a very good reason. When thinking of constructive dismissal as a concept within employment context, the following statements or descriptions ring true to this concept: “What you see is not what you get”, “It is not what it looks like”, “Resignation? – You could have fooled me” and in a particular case, the Supreme Court of Appeals (SCA) remarked that constructive dismissal represents a victory for the principle “Substance over form”, meaning that the mere form or outward appearance of something is not determinant of its nature, but its substance. I admit that I may have you now utterly confused regarding constructive dismissal and I apologise for confusing you if I did. I however hope that I now, at least, have your undivided attention, because what follows, will hopefully bring the necessary clarity.  

The jurisdictional challenge

  We all probably know by now that the CCMA is a creature of statute and functions as a prerequisite entry level dispute resolution forum, before a labour dispute can progress to the labour courts. The CCMA however cannot determine its own jurisdiction, the latter being a prerogative of the labour court. Simply put, the jurisdiction of the CCMA to entertain a labour dispute is derived from a competent referral of such a dispute. Apart from referring a dispute in a timely manner to the CCMA, the existence of a dismissal is a crucial and fundamental fact necessary for the CCMA and Bargaining Councils to be able to arbitrate an unfair dismissal dispute. From this follows that for the CCMA to entertain a constructive dismissal dispute, the dispute must be interpreted within context of the statutory definition of Section 186(1) of the Labour Relations Act (LRA), dealing with the meaning of “dismissal”. The concept “constructive dismissal” is imported from UK law into South African employment law, but one does not find the term “constructive dismissal” defined or even mentioned by name anywhere in our labour statutes, while it is extensively dealt with in case law. By implication, we find constructive dismissal hinted at in Section 186(1)(e) of the LRA, reading as follows within proper context: “Dismissal” means that an employee terminated employment with or without notice because the employer made continued employment intolerable for the employee” This implies that a constructive dismissal appears, on face value, to be a resignation, due to the fact that the employee terminated the employment. Unless and until it is objectively established that the resignation happened as a result of the employer having made continued employment intolerable for the employee, the termination of the employment contract, at issue here, remains a voluntary resignation, rendering the CCMA without jurisdiction to entertain any dispute related to such termination of the employment contract. Consequently, the first and foremost challenge which can be expected from the employer when faced with an allegation of constructive dismissal, will be a jurisdictional challenge, arguing that the employee practically resigned out of his/her own free will, rendering the CCMA without jurisdiction to entertain the dispute. In an ordinary unfair dismissal case, the employee merely has to prove the fact of the termination (the latter obviously initiated by the employer) where after the onus moves to the employer to prove that such dismissal was not unfair (see Section 192 of the LRA) – not so, in case of a claim of constructive dismissal. It is incumbent on the employee claiming constructive dismissal to prove (at least on a balance of probability) the fact of the termination of employment (usually the resignation itself will suffice), as well as the constructive nature of such termination. To end off the jurisdictional challenge related to constructive dismissal, it may be important to reiterate that where the term “dismissal” is defined in Section 186(1) of the LRA, in all instances, the definition is couched in the negative, meaning that the employer is in the wrong in dismissing the employee, as opposed to employment terminations such as retrenchments and incapacity terminations, considered “no fault” terminations. The fact that we are dealing in Section 186(1) and more particularly in Section 186(1)(e), with disputed employment terminations, brings it within ambit of the CCMA’s jurisdiction when sufficiently substantiated. Lastly, for completeness sake, at common law, an applicant for employment becomes an employee for purposes of the provisions of employment law and remains an employee until, for whatever reason, the employment contract comes to an end. Therefore, at common law, only once employee status is achieved and for as long as it endures, will the person enjoy protection under employment law. However, in developing the common law, our law often makes use of fictions and presumptions and in this regard the Employment Equity Act (EEA) in Section 9 provides that, for purposes of certain sections of the EEA, the definition of “employee” includes an applicant for employment. On the other hand, our courts consistently had no difficulty in finding that an employee, having been dismissed and hence under common law was no longer “an employee”, is never-the-less still “an employee” for purposes of the protection against an unfair dismissal, thereby giving effect to the right not to be unfairly dismissed enshrined in Section 185 of the LRA, read in conjunction with Section 23 of the Constitution of South Africa (the right to fair labour practices). A claim of constructive dismissal therefore does not automatically confer jurisdiction to the CCMA to entertain a dispute in this regard. It needs specific circumstances to prevail objectively, to entitle the employee to relief from the CCMA and labour courts.  

What is necessary for an employee to prove to succeed with a claim of constructive dismissal?

  As mentioned earlier in this article the employee, in broad terms, has to prove the fact of the termination of employment (the resignation), plus the constructive nature of such termination. I will focus on the latter requirement in the rest of this article and in doing so, take a broad view of the aspects and circumstances which need to be in place to establish constructive dismissal, as extracted from relevant case law. After some development of the requirements for constructive dismissal (which I will not bore you with), with the advent of the current 1995 LRA, the Labour Appeal Court (LAC) in Albany Bakeries Ltd v Van Wyk & others established that the prime and only consideration to establish constructive dismissal is whether the employer made continued employment intolerable for the employee. This implies that all reasonable avenues available (e.g. following the grievance procedure) have already been exhausted to no avail. This effectively disposed with the need for the employee to show that he/she resigned as a last resort or that he/she had no other choice but to resign, which position was confirmed by the Constitutional Court in Strategic Liquor Services v Mvumbi (2010). When addressing the alleged intolerability of the situation which prompted the employee to resign, it will be advisable to take heed of the following in the employee’s statement of case (gleaned from relevant case law):

• Conduct making continued employment intolerable must be of the employer’s making and within the employer’s control, rendering the employer culpably responsible (objective test);
• The employer’s conduct, objectively, must have lacked reasonable and proper cause;
• The conduct of the employer must be such that no employee could reasonably be expected to continue with the employment relationship (objective test);
• While the resultant termination of employment, theoretically, may have been with contractual notice, a delay in terminating the employment contract, such as working out the notice period or seeking alternative employment prior to resigning, could defeat the notion of constructive dismissal, since it suggests that the situation could not have been intolerable after all and that voluntary resignation was contemplated, respectively. Analogy for illustrative purposes:If an aeroplane pilot encounters severe problems in flight, but still managed to do a successful emergency landing, this cannot be equated to constructive dismissal, while using the ejection seat would have. Resigning within context of constructive dismissal is essentially an irrational decision taken totally out of character due to the intolerability of the situation being faced by the employee.
• It must be clear that the employee did not have the intention to terminate the employment relationship and, was it not for the intolerable situation prevailing, he/she would have continued with employment indefinitely;
• The employer’s conduct made the situation so intolerable that the employee was rendered unable to fulfil his/her most important function, namely, to work as obliged by the employment contract;
• The employee must have reason to believe that the employer will not reform or abandon the pattern of creating an unbearable working environment.

Where the employee succeeded in substantiating, at least on a balance of probability, the existence of the above aspects of the intolerability of the employer’s conduct, the courts had no hesitation to find in favour of the employee claiming constructive dismissal. Whether you are an employee faced with a potential constructive dismissal situation or an employer being confronted with an allegation of having constructively dismissed an employee, you will be well-advised to take due notice of the intricacies of the concept of constructive dismissal, as alluded to in this article. Assistance in this regard is available by simply contacting the JJK ER/IR Consultancy at jjk.erir@mweb.co.za. Author: J J (Koos) van der Merwe – Chartered HR Professional, registered with the SABPP