The Employee’s Demanding Test for Constructive Dismissal
Given the complex nature of human beings and the intricacies often involved in the employment relationship, it happens from time to time that an employment relationship may sour. South African labour law has recognised this unfortunate eventuality and created a mechanism for disgruntled employees to address the situation through the referral of a claim of ‘constructive dismissal’ to the Commission for Conciliation, Mediation and Arbitration (CCMA).
Where the Law Stands
The guiding principles for constructive dismissal stem from Sections 185 and 186 of the Labour Relations Act (LRA), which provide that every employee has the right not to be unfairly dismissed.
Section 186(1)(e) expands the definition of dismissal to include where ‘the employee terminated employment with or without notice because the employer made continued employment intolerable for the employee’ – colloquially referred to as constructive dismissal. In essence, this contemplates situations where the employee resigns as a last resort because the employment relationship has irreparably broken down.
The Core Requirements
It is trite in South African law that the test for constructive dismissal hinges on four requirements, namely that:
- The employee must have terminated the contract;
- Continued employment became intolerable;
- The company was responsible for rendering a continued employment relationship intolerable; and
- The employee must have had no reasonable alternative.
These principles were clearly expressed in Solid Doors (Pty) Ltd v Theron NO and Others (2004) 25 ILJ 2337 (LAC).
The problem that arises from these principles, is that many employees believe that at first instance of unhappiness with their job, they can simply quit and claim constructive dismissal to get some form of compensation out of the situation. However, as we will see below, it is not as easy as it may appear.
Intolerability Under the Microscope
In the case of Gold One Limited v Madalani and Others (2020) 41 ILJ 2832 (LC), an interesting scenario played out wherein a manager of the company, Ms Madalani, had acceded to a transfer to a different mine and upon various instances of late coming and a complaint from a client of the company, Gold One elected to have a counselling session with Ms Madalani in line with their disciplinary policies and procedures. However, Ms Madalani took issue with this approach and insisted that the company was suddenly trying to alter her terms and conditions of employment, and attempting to compel her to terminate the employment relationship. This back and forth between Gold One and Ms Madalani went on for some time until, quite literally, Ms Madalani packed her bags and did not return, referring a constructive dismissal case to the CCMA which eventually ended up at the Labour Court. Judge Nkutha-Nkontwana presided over the matter and re-affirmed the principles governing constructive dismissal matters.
In the judgement, the honourable judge re-iterated that “intolerability has a high threshold and requires far more than just a difficult, unpleasant, or stressful working environment or employment conditions, or for that matter, an obnoxious, rude, or uncompromising superior who may treat employees badly”. Furthermore, the judge added that “put otherwise, intolerability entails an unendurable or agonising circumstance marked by the conduct of the employer that must have brought the employee’s tolerance to a breaking point” – indeed something to not be considered lightly.
This case is quite important given that it reinforces the principle that the objective test for constructive dismissal is inherently difficult for employees to prove, and not something to be used frivolously the moment an employee has a dispute with their manager or becomes unhappy with their work. Furthermore, constructive dismissal also cannot be used as a way to avoid disciplinary action.
The Employee’s Burden
South African courts, notably in cases such as Jooste v Transnet Ltd and Pretoria Society for the Care of the Retarded v Loots, have crystallised requirements for employees to succeed in constructive dismissal claims.
In terms of the requirement that the employee must have terminated the employment relationship:
- The resignation must be voluntary in form but compelled in substance.
- Constructive dismissal cannot exist if the employer actually dismissed the employee directly or if the employee is still employed.
- Critically, the employee must show that resignation was the last resort.
Important aspects regarding continued employment being objectively intolerable include:
The test is objective, not based merely on the employee’s subjective feelings.
- The conduct complained of must make continued employment so unbearable that a reasonable person could not be expected to stay.
Examples of intolerable conduct may include persistent harassment or bullying, non-payment of salary, unilateral and substantial changes to terms and conditions, victimisation or victimisation-linked disciplinary processes, and serious breakdown in trust relationships (especially in senior roles). The threshold is high; discomfort or unhappiness will not be sufficient.
The intolerability must have been caused by the employer either through direct conduct or through failure to act where there was a duty to do so (e.g., ignoring harassment complaints). Importantly, even omissions such as failure to intervene or remedy a situation can suffice.
The employer’s conduct must have been unreasonable. Courts often assess whether the employer acted fairly and reasonably. The employer does not need to have intended to force resignation, but the conduct must have been objectively unjustifiable.
A critical element is that the employee must have had no reasonable alternative i.e. the employee must show that resignation was a last resort. This includes demonstrating that internal remedies such as grievances, appeals, or HR processes were exhausted, or would have been futile or ineffective in the circumstances. Failure to make use of available remedies often weakens the employee’s claim.
Where Claims Come Unstuck
Constructive dismissal will generally not be established where the employee relies merely on dissatisfaction, unhappiness, or personality clashes; disagrees with lawful and reasonable managerial decisions; or points to minor, isolated incidents rather than serious or sustained conduct.
It is also insufficient if the claim is based only on the employee’s subjective perception of unfairness rather than objective intolerability. Equally, resigning prematurely without affording the employer an opportunity to remedy the situation, or failing to utilise available internal remedies such as grievance procedures, will undermine a claim – unless doing so would clearly have been futile.
A High Bar for Good Reason
In summary, constructive dismissal cases are not quick and easy pay outs for disgruntled employees and instead require a solid case with objective evidence, which the employee bears the onus of proving.
Written by Dylan Scheepers
