The concept of “constructive dismissal” has its roots in English law and was adopted by the Industrial Court in the course of the development of the labour law jurisprudence under the previous Labour Relations Act. With the enactment of the current Labour Relations Act (“LRA”) and the codification of our law of unfair dismissal, the concept of a constructive dismissal was retained.
Section 186(1)(e) of the LRA states that a dismissal takes place if an employee terminates employment because the employer has made continued employment intolerable for the employee. Despite there being no specific reference to the term “constructive dismissal” in this section, the phrase has stuck. In practice, the most difficult question faced when fighting a constructive dismissal case is: when will the employer’s conduct be regarded as being intolerable? The labour courts have, over the years, developed guidelines in this regard. The recent decision of the Labour Court in HC Heat Exchangers (Pty) Ltd v Victor J L De Araujo and Others, provides a useful summary of these guidelines and an example of how they are applied in practice. A summation of the facts in this case is as follows.
The employee in this case, a Mr De Araujo, was employed by the employer as a health and safety manager. On 23 April 2015 an altercation took place between him and the factory manager, a Mr Dixon. This arose from De Araujo expressing unhappiness with a company car he had been using. Dixon swore at De Araujo and threatened to harm him. On 24 April 2015, De Araujo approached the Human Resources Manager, a Ms Hilton, and told her that he wished to report an incident that had occurred, but that he first had to see a doctor before doing so. De Araujo consulted a doctor some days later who issued him with a medical certificate booking him off work for a number of days because of anxiety and panic attacks due to “work related stress”. A few days later, De Araujo applied for a protection order against Dixon in terms of section 2(1) of the Protection from Harassment Act, 2011 and also obtained an interim order preventing Dixon from verbally or physically threatening him.
Despite being familiar with the employer’s grievance procedure, De Araujo only lodged a formal complaint some 3 weeks later, on 11 May 2015. In the formal complaint he stated that the working relationship had broken down and that he was unable to enter into the employer’s premises for as long as Dixon was there. Hilton attempted to contact De Araujo to arrange a meeting to discuss the matter. She was unsuccessful as De Araujo had not returned to work. On 12 May 2015, Hilton indicated in writing to De Araujo that a grievance meeting needed to be held immediately and asked that he return to work as soon as possible. On 13 May 2015, De Araujo met with Hilton and completed the formal grievance form. On the same day his sick leave was extended until 18 May 2015, on the basis of a medical certificate that defined his condition as “chest pain: workup/investigation”. The certificate reflected that De Araujo would be fit to resume duties on 18 May 2015. Instead of returning to work on 18 May 2015, he submitted a letter of resignation. In the letter of resignation, De Araujo recorded that his working conditions had become intolerable and his life has been threatened by Dixon. The resignation was with immediate effect.
Hilton responded to this letter on the same day. She indicated that the resignation was not accepted, that management took his allegations very seriously and that they intended to deal with the matter as one of “extreme urgency”. De Araujo was informed that a grievance meeting would be arranged as soon as he returned to work and that management was still intent on dealing with the matter, despite his resignation. De Araujo ignored this proposal and referred a constructive dismissal dispute to the Metal and Engineering Industries Bargaining Council on 19 May 2015. The arbitrator found that De Araujo had been constructively dismissed.
The employer instituted review proceedings in the Labour Court to review and set aside the award. Relying on the Labour Appeal Court (“LAC”) decision in Solid Doors (Pty) Ltd v Commissioner Theron and Others, the court reiterated the three requirements for a constructive dismissal. These are essentially the following: (1) the employee must have terminated the contract of employment; (2) the reason for the termination of the contract must have been that continued employment had become intolerable for the employee; and, (3) it must have been the employer who made continued employment intolerable.
The Labour Court accepted that the onus to prove intolerability rests solely on the employee and that the subjective views of the employee are of no consequence in discharging this onus; the enquiry to establish whether intolerability exists is an objective one.
The Labour Court reviewed and set aside the award. The primary basis for this decision appears to have been that a further requirement set by the Solid Doors decision had not been met – namely that an employee’s resignation must be a measure of last resort. De Araujo should have utilised the employer’s grievance procedure and pursued it to finality.
In the course of the judgment the court also discussed what would constitute intolerable conduct on the part of the employer. The term “intolerable” is also not defined in the LRA. In this regard the Labour Court relied on the decision of the LAC in Foschini Group v CCMA and Others which held that:
“[I]ntolerability is far more than just a difficult, unpleasant or stressful working environment or employment conditions, or for that matter an obnoxious, rude and uncompromising superior who may treat employees badly”
According to the LAC the word “intolerable” implies a situation that is more than can be tolerated or endured, or insufferable. It is something which is simply too great to bear, not to be put up with, or is beyond the limits of tolerance. The following core considerations are relevant in establishing the existence of intolerability:
- whether the employer’s conduct, considered as a whole, is such that when reasonably and sensibly judged, an employee could not be expected to put up with it – in other words, no reasonable employee could be expected to tolerate the conduct;
- resignation must have been a reasonable step for the employee to take in the circumstances. The employee must resign because he or she does not believe that the employer will ever reform or abandon the pattern of creating an unbearable work environment;
- the employer must have caused the intolerability and must be culpable in some way. At the very least it must be shown that the employer acted without reasonable and proper cause.
This decision once again illustrates the difficulties faced by an employee who alleges unfair dismissal. The test for intolerability is a strict one and, in addition, resignation has to be a measure of last resort. Finally, and as the court pointed out, even if it is found that a constructive dismissal took place, an employer may still be able to show that the dismissal was fair.