What is Constructive Dismissal | SME South Africa

Entrepreneurs enjoy looking at the positive side of things: the growth, the opportunities or the breakthroughs. But it is a tough position to be in, and with it there are drawbacks like long nights, financial troubles, project delays and employee issues. Sometimes, you need to fire employees, and sometimes, they fire you… That’s constructive dismissal, and being aware of what the consequences are, this article aims to help you improve until it gets to that point.

The Labour Relations Act 66 of 1995 is the piece of legislation that deals with the relationship between the employee and the employer. It governs what the expectations are from both parties, as well as how each should conduct themselves. From the inception of the relationship to its end is dictated by the act, guiding all parties towards making the best possible circumstances possible like working conditions, work hours and remuneration.

Constructive Dismissal

The term is used to define the instances where an employee feels that the behaviour of the employer (or management) has forced them to resign. Since the environment has been made so intolerable, it is treated differently from a regular resignation.

The sections within the Act that are relevant to constructive dismissal are sections 186 and 192.

When a resignation is deemed a constructive dismissal, then the employee must be able to prove that the environment was intolerable. The proof is required in three areas:

(1) the employee ended the contract of employment;

(2) the continued employment had become intolerable for the employee; and

(3) the employer must have made continued employment intolerable.

Furthermore, the proof will need to indicate that:

• The resignation was a last resort; Other attempts to mediate the situation were undertaken.
• The resignation is objective; it’s not about the employee’s feelings, but reasonable that the employer’s actions caused it
• The resignation is not voluntary; if it were not for the circumstances, the employee would not have resigned and will not intend to retract the resignation.

Examples of Constructive Dismissal

Some reasonable reasons that an employee may feel forced to resign based on the behaviour of the management is as follows:

• When sexual misconduct occurred and was reported, whether the perpetrator was a manager or a coworker, management failed to take appropriate action to protect the victim.
• Employees were suspended without pay after the employer experienced financial difficulties.
• Employees were encouraged to resign unless they wanted to face an unfair summary dismissal.
• If another under-qualified employee was promoted without a valid reason.
• If an employee was temporarily employed on terms that were exploitative and non-compliant with the Basic Conditions of Employment Act 75 of 1997.
• Being bullied, but after raising the grievance, nothing is done about it.
• Being paid irregularly and not the agreed amount without a good reason.
• Unreasonable changes are made to workplaces or working patterns without agreement.

Determine if Your Conduct Constitutes Intolerable

‘Intolerable’ is defined as conduct that is insufferable or unsupportable, and leads to the severed employee-employer relationship. To measure whether it is deemed intolerable or not, the following criteria must be met:

1. The employment circumstances were so intolerable that the employee could truly not continue to stay on.
2. The unbearable circumstances were the cause of the resignation of employee.
3. There was no reasonable alternative at the time but for the employee to resign to escape the circumstances.
4. The unbearable situation must have been caused by the employer.
5. The employer must have been in control of the unbearable circumstances.

The burden is firstly on the allegedly wronged employee to prove the unbearable circumstances, and attempt to address them before resorting to resigning. After a claim of constructive dismissal is brought by the employee, it is then the employer’s responsibility to prove that the claim is unreasonable.

As an employer, it is your responsibility to ensure that you create fair and reasonable working conditions while meeting the requirements of the Labour Relations Act. Your employees are within their rights to determine if your behaviour is bearable or not, but the important part is to ensure that you remain within the law. Let your conduct be above reproach. This will ensure that you and your employees work well and happily together.