and Grant Ray-Howett of Kanichowsky, Solomon & Charalambous.
THIS week, Grant Ray-Howett B.A LLB, This week, Grant Ray-Howett of Kanichowsky, Solomon & Charalambous discusses the concept of constructive dismissal under the Labour Relations Act of 1995.
The meaning of constructive dismissalMany employers are under the impression that if they are in possession of a letter of resignation that they have in their hands an elixir, which is a cure all against the ills of claims of unfair dismissal. The Labour relations act is here to tell you that this is not the case. There are situations in which an employee may sue and be successful for unfair dismissal despite the fact that it is they that terminated the employment contract. These situations are collectively know as constructive dismissals and for the first time, constructive dismissal has a statutory existence. In this article I look at what constructive dismissal means under the new act and what the effect of this is on Labour relations.
Section 186 of the Labour Relations Act of 1995 defines the set of circumstances in which an employee is said to have been dismissed. One of the circumstances in which a dismissal is said to have taken place is given by section 186(e) that says that:
A dismissal means that an employee terminated a contract of employment with or without notice because the employer has made continued employment intolerable for the employee
Read the words carefully. Yes it does say that despite the fact that the employee has terminated the employment relationship, if the employer has made continued employment for the employee intolerable, the law considers the employer to have dismissed the employee. Despite the fact that there remain pockets of ambiguity in S186(e), this definition of dismissal captures the essence of constructive dismissal. Constructive dismissal occurs when behavior on the employer’s part forces the employee to resign or leave. However the difficult part is in determining when the employers behavior makes continued employment intolerable.
When it comes to determining the scope of constructive dismissal, two basic approaches have been taken. One the one hand we have the strict or austere approach. This was an approach that was followed by some of the industrial court judges. Under this approach, a constructive dismissal is confined to the situation in which there is evidence of a definite intention on the part of the employer to repudiate the employment contract.
A classic example of this situation is where the employer, Mr. X comes to the employee, Mr. Y and says either you resign or I will put you through a disciplinary hearing and dismiss you. More often than not Mr. Y resigns in an attempt to avoid a dismissal being placed on his record. Under the austere approach, this would be considered a constructive dismissal. It is thought that this narrow approach was due, in the absence of statutory authority, to a need on the part of the judiciary to justify it’s interference with the employment relationship.
On the other hand there exists a generous approach to constructive dismissal, which considers a greater range of acts on the employer to constitute a constructive dismissal. This approach stems from the view that a tacit term of every employment contract is that the employer cannot behave in such a way as to damage the employment relationship. It is this more generous approach which has been adopted in recent CCMA decisions, where the recent trend is to adopt a generous, flexible approach to constructive dismissal.
It is impossible to list all the factors that are taken into consideration when determining when an employer’s action has made a continued relationship impossible. However if we look at the decided cases we see that the kind of behavior that is considered to fall under constructive dismissal often centers on the kind of behavior which undermines the employee’s status in the work situation. Often because there is a disagreement or clash of personalities between the employer and employee, the employer takes steps, which have the result of marginalising or alienating or undermining the credibility of the employee.
This kind of behavior often takes the form of subjecting the employee to gratuitous disciplinary action, deprivation of benefits or failing to promote them. In one case that came before the CCMA for arbitration, an employer was held to have constructively dismissed an employee because over a six month period, the employer took the following actions: the employee was not given an expected promotion; the employee unilaterally attempted to change the working conditions of the employee, when this failed the employer subjected the employee to a series of disciplinary actions in an attempt to force her to accept a new job description; the employer also gave the employee a below average increase despite the fact that she had performed well during the relevant period. Finally the employee felt that she could work there no longer and gave in her resignation.
However one must also remember that the employees actions are scrutinized and taken into account when determining whether there had been a constructive dismissal. The employee cannot just stand by, take the abuse and say nothing. He or she is expected to tell someone from management or whoever the relevant people are, that he or she has a grievance. In fact one of the factors that played a significant part in the CCMA’s decision that I referred to above was that the employer consistently ignored the grievances of the employee.
Remember the old legal maxim, silence is consent. The courts or the CCMA will also look at the employee’s side in respect of the options that are available to them; resignation must be the last option. The CCMA is wary of the opportunistic employee, who resigns and then attempts to extort money from the employer. This is why the employee must have attempted though other means, like stating grievances, to put and end to the way they are being treated.
One must remember that the onus is on the employee to convince the court that they have been dismissed. It the case of constructive dismissal, the employee must bring enough evidence before the CCMA to convince them that they had little option but to resign.
Employer must then remember that a letter of resignation will not necessarily protect them. Their behavior towards the employee prior to the resignation plays a significant role in determining whether the resignation will be seen as such or not. On the other hand the employee must not resign carelessly but must consider whether resignation is the only option and whether or not they can bring concrete proof of this. If not their claim for unfair dismissal is likely to fail.
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