Constructive dismissal is one of the most misunderstood concepts in South African labour law. Many employees assume that resigning automatically entitles them to compensation, while employers often fail to appreciate that their conduct may expose them to claims even where an employee resigns voluntarily.
In reality, constructive dismissal occurs when an employee resigns because the employer has made continued employment intolerable.
The Commission for Conciliation, Mediation and Arbitration (CCMA) and Labour Courts carefully assess these cases, and employers found responsible may face substantial financial consequences.
At Mokgwatlheng Attorneys Inc, we assist employers and employees in navigating constructive dismissal disputes and ensuring compliance with South African labour legislation.
Section 186(1)(e) of the Labour Relations Act (LRA) defines constructive dismissal as a situation where:
“An employee terminated employment with or without notice because the employer made continued employment intolerable for the employee.”
Although the employee physically resigns, the law may regard the resignation as a dismissal if the resignation was effectively forced by the employer's conduct.
To succeed in a constructive dismissal claim, an employee must generally prove:
CCMA commissioners and courts expect employees to exhaust internal remedies where reasonably possible before resigning.
Not every workplace disagreement amounts to constructive dismissal. Examples of conduct that may give rise to a claim include:
Each matter is assessed on its own facts and circumstances.
Employees often misunderstand the threshold required for a successful claim. The following circumstances may not be sufficient on their own:
The test is whether continued employment became genuinely intolerable rather than merely uncomfortable.
An employee repeatedly reports harassment by a supervisor. Despite numerous complaints, management takes no action. The situation continues for several months, causing significant distress. The employee eventually resigns.
In these circumstances, a constructive dismissal claim may arise.
An employer consistently fails to pay salaries on time and ignores concerns raised by employees. Financial hardship results, and an employee resigns.
The CCMA may regard the resignation as a constructive dismissal.
An employer reduces an employee's salary without consultation or agreement. The employee objects, but the employer refuses to engage.
Depending on the circumstances, a constructive dismissal claim may follow.
Employees should generally take reasonable steps to resolve workplace problems before resignation. This may include:
Failure to pursue available remedies may weaken a constructive dismissal claim.
Employers can significantly reduce the risk of constructive dismissal claims by:
Proactive management often prevents disputes from escalating into litigation.
Where constructive dismissal is proven, the CCMA or Labour Court may award compensation. Compensation is generally determined with reference to:
(In certain cases, reinstatement may also be considered.)
A proactive approach to employee relations is often the most effective defence.
Our labour law team assists employers and employees with:
We provide practical and strategic labour law solutions designed to protect rights while minimising legal and operational risks.
If you believe you have been constructively dismissed, or if your business is facing a constructive dismissal claim, seek professional legal advice as early as possible.
Mokgwatlheng Attorneys Inc provides experienced labour law representation to clients throughout Midrand, Centurion, Edenvale, Johannesburg, and Gauteng.