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What is constructive dismissal?

An employee resigns and claims that the resignation occurred not because the employee wanted to leave but as a result of the employer’s intolerable conduct. Because of the fact that the employee alleges that the resignation was involuntary and was intentionally or unintentionally coerced by the employer, the resignation becomes a constructive dismissal.

To convince an arbitrator or judge that unfair constructive dismissal has taken place the employee must show that:

  • The employment circumstances were so intolerable that the employee could truly not continue to stay on.
  • The unbearable circumstances were the cause of the resignation of the employee.
  • There was no reasonable alternative at the time but for the employee to resign to escape the circumstances.
  • The unbearable situation must have been caused by the employer.
  • The employer must have been in control of the unbearable circumstances.
Employers need to be extremely careful they do not discipline employees unfairly.

The labour law on constructive dismissal was borne out of case law and was later codified in the Labour Relations Act No 66 of 1995 (LRA). Section 186 (1) (e) includes in the definition of dismissal the situation where “… an employee terminated a contract of employment with or without notice because the employer made continued employment intolerable for the employee”. It must be stressed that questionable acts of the employer will not always constitute unfair constructive dismissal.

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