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What is Constructive Dismissal?

Questions are often asked around constructive dismissal. What is it?

The basics are that constructive dismissal may be defined as “a situation in the workplace, which has been created by the employer, and which renders the continuation of the employment relationship intolerable for the employee – to such an extent that the employee has no other option available but to resign.”

In Pretoria Society for the Care of the Retarded v Loots [1997] 6 BLLR 721 (LAC), the Court referred to Jooste v Transnet Ltd t/a SA Airways (1995) 16 ILJ 629 (LAC), stating that the first test was whether, when resigning, there was no other motive for the resignation – in other words, the employee would have continued the employment relationship indefinitely had it not been for the employer’s unacceptable conduct. It went further to state that when any employee resigns and claims constructive dismissal, he is in fact stating that under the intolerable situation created by the employer, he can no longer continue to work, and has construed that the employer’s behaviour amounts to a repudiation of the employment contract.

In view of the employer’s repudiation, the employee terminates the contract. When an employee claims constructive dismissal, he must prove it.

To convince an arbitrator or judge that constructive dismissal has in fact taken place, an employee must show:

  1. The employment circumstances were intolerable to the point that he could not go on;
  2. These unbearable circumstances caused him to resign;
  3. There was not a reasonable alternative at the time and he was forced to resign to escape the circumstances;
  4. The unbearable situation was caused by the employer; and
  5. The employer was in control of the unbearable circumstances.

Proving a case of constructive dismissal is difficult. That is because the onus lies on the employee’s shoulders to prove it, which is notoriusly difficult.

There have been many referrals of constructive dismissal to the CCMA which have not succeeded – because the applicant has failed to prove the introduction of any intolerable working condition, amounting to repudiation by the employer of the employment contract. Referrals based on salary increases not been granted, bonuses refused, unfavourable work performance assessment, overlooked for promotion, and so on – such referrals are bound not to succeed, because the applicant is unable to prove that the employer’s action amounted to a repudiation of the employment contract, or introduced a condition that was irremediable.

A dismissal based on the employer having followed an unfair disciplinary procedure, resulting in the resignation of the employee, could be a constructive dismissal. The resignation of an employee in the face of a disciplinary hearing – and resigning in order to avoid the disciplinary hearing – would not necessarily constitute constructive dismissal. It may well do so if the employee was threatened – “resign, or face a disciplinary hearing where you will be dismissed anyway”, might justify a dispute of constructive dismissal.