Constructive dismissal is a legally recognised ground for dismissal, where an employer’s actions render the employment relationship intolerable for the employee. Under Section 186(e) of the Labour Relations Act 66 of 1995, it signifies a crucial point where an employee’s resignation is deemed involuntary due to the employer’s conduct.

Understanding the requirements of constructive dismissal is key in determining what needs to be alleged and proved, as well as the possible defences available. In the 2003 judgement, Solid Doors (Pty) Ltd v Commissioner Theron and Others, the Labour Appeal Court held that to sustain a constructive dismissal claim, all three of the below requirements must be met:

• An employee must demonstrate that they have terminated their employment;
• The reason for termination is that the continued employment has become intolerable for the employee, and
• The employer must have caused the employee’s continued employment to be intolerable.

In the recent Labour Court judgement of Wium v Barloworld Toyota Centurion, in her resignation letter, the employee
alleged that her employer made her continued employment intolerable by implementing changes to the commission structure. This led to a significant reduction in her commission earnings, which were a substantial portion of her total earnings. Upon analysing the evidence before her, the arbitrator concluded that the employee failed to prove that she was constructively dismissed.

The employee sought redress by reviewing and setting aside the arbitration award issued by the arbitrator at the Labour Court, claiming that she had been constructively dismissed. However, the Court found that the employee’s resignation was premature and unjustified. According to the Court, the employee did not make a serious attempt to adapt to the new commission structure, and her decision not to do so was deemed unconscionable. The Commissioner correctly found that the employee failed to prove constructive dismissal.

Constructive dismissal marks a pivotal moment wherein intolerable conditions instigated by the employer compel an employee to resign. To navigate this terrain successfully, employers must understand the components of constructive dismissal, which include termination, intolerable conditions, and employer accountability. It is crucial to maintain equitable workplace relations by fostering a healthy work environment, promoting open communication, and implementing policies that ensure fair treatment of employees. Employers must proceed cautiously to avoid any actions leading to constructive dismissal claims.

If you are an employer, our legal services can help you navigate the intricacies of constructive dismissal to maintain equitable workplace relations. We can help you understand the components of constructive dismissal, advise on implementing fair policies, and promote open communication to foster a healthy work environment.

If you are an employee facing intolerable work conditions, our legal services can provide you with the necessary guidance and support to effectively pursue a constructive dismissal claim. We can help you understand your rights, gather evidence, and represent you in legal proceedings.

Contact LnP Beyond Legal to learn more about our legal services.