Constructive dismissal and reinstatement: it IS possible

The essence of constructive dismissal is that the relationship between the employee and employer has become so intolerable that the employee has no other option but to leave employment with the employer.

In terms of our law, an employee generally has to prove the following aspects to show that he was constructively dismissed:

  • The employment circumstances were so intolerable that the employee could not continue to remain in employment.
  • The intolerable circumstances were the reason for the employee’s resignation.
  • There existed no other reasonable alternative for the employee but to resign in order to escape the intolerable circumstances.
  • The intolerable circumstances were caused by the employer.
  • The employer had some form of control over the intolerable circumstances.

The common thread in the above relates to the intolerable circumstances which the employer causes and which the employee finds himself being subjected to, leading to his resignation.

Our law provides for remedies for any person who has been unfairly dismissed – ranging from compensation to reinstatement with the employer. Reinstatement is seen as the primary remedy for unfair dismissal, but reinstatement is generally not perceived as a plausible remedy where the circumstances surrounding the dismissal are such that a continued employment relationship would be intolerable. Accordingly, given the intolerable nature of the relationship in a claim of constructive dismissal, one would not regard reinstatement as a plausible remedy in such a case and could argue that such a remedy would in general not be applicable to constructive dismissal cases.

In the decision of Western Cape Education Department v General Public Service Sectoral Bargaining Council and Others [2013] 8 BLLR 834 (LC) the court had to consider whether reinstatement was a possible remedy for an employee who claimed constructive dismissal.

In this case, the employee had worked for the Western Cape Education Department for 23 years. The employee in 2006 suffered a heart attack, which led to him being diagnosed with post-traumatic stress disorder and clinical depression. In 2007, the employee applied for ill-health retirement and temporary incapacity leave from the Department.

Between 2007 and 2009 the employee corresponded with the Department regarding his application. Due to a technical error on the Department’s side, he was informed that he would need to resubmit his application for temporary incapacity leave, which he did three months later. The Department regarded this submission as being late and informed the employee during 2009 that the period of leave that the employee had taken would retrospectively be regarded as unpaid leave. In addition he was informed that the Department would take action to recover money paid to him by making monthly deductions from his salary in order to recover amounts that had been paid to him in his absence. These deductions would effectively leave him with an income of R2 159 per month.

The employee submitted a formal grievance regarding the steps taken by the Department, but when the grievance process broke down he resigned and referred a constructive dismissal dispute to the Bargaining Council.

The arbitrator found that the employee had been constructively dismissed as the Department’s deductions which left the employee with virtually no income had created an intolerable circumstance which justified the employee’s resignation. In an unprecedented finding, the arbitrator also ordered the reinstatement of the employee.

The Department took the decision on review to the Labour Court arguing that the order of reinstatement was incompatible with the resignation of the employee. The Labour Court, however found that as the circumstances which resulted in the employee’s resignation, namely, excessive deductions, would no longer exist, reinstatement would be appropriate.

The Labour Court thus confirmed that where an employee’s intolerable circumstances are no longer intolerable after resignation, the employee can claim reinstatement as a remedy, thereby creating precedent for employees to claim reinstatement – as well as standing as a warning to employers that reinstatement could be possible in the case of constructive dismissal.

August 24, 2014

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