Constructive dismissal

Constructive dismissal is a term that often appears in labour law, but still causes confusion for many employers. Constructive dismissal refers to a situation where an employee resigns on their own, but the resignation is directly linked to the employer’s action or failure to act. The employee feels that he/she had no other choice but to resign due to the work environment being made intolerable or unreasonable.

Where is it found in the law?

In South Africa, constructive dismissal is clearly defined in section 186(1)(e) of the Labour Relations Act 1996. It is described as the termination of employment by the employee, with or without notice, because the employer’s actions (or inaction) have made it intolerable for the employee to continue with the employment.

It is important to remember that the burden of proof lies with the employee. If a dispute is referred to the Commission for Conciliation, Mediation and Arbitration (CCMA) or Labour court, the employee will therefore have to prove that the employer’s actions were objectively unreasonable and that there was no other reasonable option available to the employee than to resign.

What is constructive dismissal?

The essence of constructive dismissal lies in the relationship between employer and employee. An employer has a duty to maintain a fair, safe and respectful working environment. If the employer fails to do so through intimidation, discrimination, unfair labour practices or failure to respond to complaints, this may give rise to a constructive dismissal claim.

It is important to understand that not every resignation qualifies as constructive dismissal. It is not enough for an employee to simply be dissatisfied. Conflicts over performance management or minor disagreements over trivial matters with colleagues do not automatically qualify as constructive dismissal.

A successful claim for constructive dismissal

To be successful with a claim for constructive dismissal, the employee must be able to prove that:

• the resignation can be directly attributed to the employer’s action and/or failure to act;
• all reasonable steps were taken to report and address the problem internally;
• the employer was made fully aware of the intolerable situation;
• the employer failed to take any steps to remedy the situation; and
• the work situation deteriorated to such an extent and became intolerable that no reasonable alternative other than termination of employment was available to the employee.

Practical examples for employers

• Unfair disciplinary action, such as when an employee is repeatedly punished without just cause or an opportunity to present his/her case.
• Intimidation and bullying by a manager which is never corrected can create a hostile work environment.
• Drastic changes to terms of employment without proper consultation, such as a reduction in salary or change in working hours, which are exacerbated by threats such as that the employee will be dismissed if he/she does not comply with the request.
• Failure to act on harassment in the workplace, such as when an employee reports sexual harassment and nothing is done, can be a strong basis for a constructive dismissal claim.

Tips for employers

The best way to prevent constructive dismissal is to consistently apply the principles of fairness and implement policies that address misconduct and harassment in the workplace. Employers should encourage open communication, take complaints seriously and follow up appropriately. Be transparent about any changes to conditions of employment and obtain the employee’s input and consent before implementing decisions.

It also helps to train managers in human resource practices, disciplinary processes and conflict management. Ultimately, it’s about respect and consistency. When employees feel they are treated fairly and their concerns are taken seriously, the risk of constructive dismissal is significantly reduced.

Although it is the employee’s responsibility to prove constructive dismissal, it is often the employer’s actions or negligence that cause the problem. By creating a fair and respectful work environment, maintaining open communication, and following procedures correctly, employers can protect themselves from disputes and arbitrations.

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