CONSTRUCTIVE DISMISSALS

Written by Dineo Sedibeng

One of the most frequently misunderstood concepts in South African labour law is constructive dismissal. Employers are often surprised when an employee who has resigned subsequently refers a dispute to the CCMA, claiming that they were, in fact, dismissed.

Understanding what constitutes constructive dismissal, and, equally important, what does not, can help employers manage workplace issues fairly while reducing the risk of costly disputes.

What is Constructive Dismissal?

The Labour Relations Act recognises that, in certain circumstances, an employee's resignation may legally be regarded as a dismissal. This occurs when an employer's conduct makes continued employment so intolerable that the employee has no reasonable alternative but to resign.

In simple terms, constructive dismissal arises when the employer creates or allows working conditions that effectively force an employee to leave.

However, not every unhappy employee who resigns has a valid claim. The legal threshold is high, and constructive dismissal remains one of the more difficult claims for employees to prove.

The Burden of Proof

In a constructive dismissal dispute, the responsibility lies with the employee to prove that:

• the employer created or permitted intolerable working conditions;

• the employer was responsible for those conditions;

• the employee genuinely wished to remain employed; and

• resignation was the only reasonable option available.

If the employee cannot satisfy these requirements, the resignation remains just that—a voluntary resignation.

What May Constitute Constructive Dismissal?

Every case is decided on its own facts, but examples of employer conduct that may support a constructive dismissal claim include:

• Persistent harassment or victimisation.

• Bullying or public humiliation.

• Serious breaches of trust and confidence.

• Unilateral reductions in salary or significant changes to employment conditions.

• Demotion without proper consultation or justification.

• Suspension without pay where there is no legal or contractual basis.

• Sexual harassment or discrimination that is not addressed.

• Threatening an employee with dismissal unless they resign.

The courts will consider the employer's conduct as a whole rather than focusing on one isolated incident.

What Does Not Usually Amount to Constructive Dismissal?

Many disputes fail because employees confuse dissatisfaction with intolerable working conditions.

Generally, the following situations on their own are unlikely to amount to constructive dismissal:

• Not receiving a salary increase.

• Being refused a bonus.

• Receiving an unfavourable performance appraisal.

• Being overlooked for promotion.

• Ordinary workplace disagreements.

• Resigning simply to avoid attending a disciplinary hearing.

While these situations may be frustrating, they do not necessarily mean that the employer has fundamentally breached the employment relationship.

Fair Discipline Is Not Constructive Dismissal

Employers should not be discouraged from taking legitimate disciplinary action where warranted.

An employee who resigns merely because disciplinary action has been initiated will not automatically succeed with a constructive dismissal claim. However, if the disciplinary process is manipulated, abusive, or designed to force an employee to resign, the position may be very different.

The key consideration is whether the employer acted fairly, consistently, and in accordance with proper procedure.

Practical Tips for Employers

The best protection against constructive dismissal claims is proactive and fair management practices. Employers should:

• Treat employees with dignity and respect.

• Apply disciplinary procedures consistently and fairly.

• Consult employees before implementing significant changes to employment conditions.

• Avoid unilateral changes to remuneration or working conditions.

• Address grievances promptly and objectively.

• Keep accurate records of meetings, consultations and disciplinary processes.

• Obtain professional labour law advice before making decisions that may affect employees' contractual rights.

A Word of Caution

Constructive dismissal claims are not easy to prove, but they are certainly not impossible.

Where employers engage in repeated harassment, victimisation, unfair treatment or unilateral changes to employment conditions, they expose themselves to significant legal risk. Likewise, employees who resign without first considering all available alternatives also take a substantial risk, as they bear the burden of proving their case.

For both employers and employees, maintaining open communication, following fair procedures and respecting the employment relationship remain the best safeguards against unnecessary disputes.

EOHCB encourages all employers to seek professional advice whenever workplace issues arise. Early intervention and sound labour practices are almost always more effective and less costly than defending a dispute before the CCMA or Bargaining Council.